Western Digital (WDC) 10-K risk factor changes: FY2025 vs FY2024

Adverse changes in global or regional economic and social conditions, including, but not limited to, volatility in the financial markets, reduced access to credit, recession, inflation, rising interest rates, [added: trade wars or changes to tariffs,] slower growth in certain geographic regions, political uncertainty, geopolitical tensions or conflicts, terrorism, other macroeconomic factors and new or changed regulations, could significantly harm demand for our products, increase credit and collectability risks, result in revenue reductions, reduce profitability as a result of underutilization of our assets, cause us to change our business practices, increase manufacturing and operating costs or result in impairment charges or other expenses.

We are also subject to risks that could harm our business associated with our global manufacturing operations, global sales efforts and our utilization of contract manufacturers, including: the need to obtain governmental approvals and compliance with evolving foreign regulations; the need to comply with regulations on international business, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act 2010, the anti-bribery laws of other countries and rules regarding conflict minerals; [added: the effects of political and economic instability;] exchange, currency and tax controls and reallocations; [added: the ongoing development and applicability of global and local tax systems;] weaker protection of IP rights; policies and financial incentives by governments in China, the United States, and countries in Europe and Asia designed to reduce dependence on foreign [removed: semiconductor] manufacturing capabilities; trade restrictions, such as export controls, export bans, import restrictions, embargoes, sanctions, license and certification requirements (including [removed: semiconductor,] encryption and other technology), [added: trade wars,] tariffs and complex customs regulations; [removed: and] difficulties in managing international operations, including appropriate internal [removed: controls.][added: controls; and fluctuations in financial markets and interruptions to supply chains from public health crises.]

Many of the components and much of the equipment we acquire must be specifically designed for use in our products or for developing and manufacturing our [removed: products,] [added: products] and are only available from a limited number of suppliers, some of whom are our sole-source suppliers.

We therefore depend on these suppliers to meet our business [removed: needs] [added: needs,] including dedicating adequate engineering resources to develop components that can be successfully integrated into our products.

Trade [removed: restrictions, including] [added: restrictions (including] tariffs, quotas and [removed: embargoes,] [added: embargoes),] demand from other high-volume industries for materials or components used in our products, disruptions in supplier relationships or shortages in other components and materials used in our customers’ products could result in increased costs to us or decreased demand for our products, which could negatively impact our business.

We do not have long-term contracts with some of our existing suppliers, [removed: nor do] [added: and] we [added: do not] always have guaranteed manufacturing capacity with our suppliers, so we cannot guarantee that they will devote sufficient resources or capacity to manufacturing our [added: products.]

We have cancelled or deferred, and may continue to cancel or defer, outstanding purchase commitments with certain suppliers due to changes in actual and forecasted demand, which has resulted, and may continue to result [removed: in] [added: in,] fees, penalties and other associated charges.

Our suppliers may be acquired by our competitors, decide to exit the industry or redirect their investments [removed: and] [added: or] increase costs to us.

If a [removed: fire (including a climate change-related fire),] [added: fire,] flood, earthquake, tsunami or other natural disaster, condition or event such as a power outage, contamination event, terrorist attack, cybersecurity incident, physical security breach, political instability, civil unrest, localized labor unrest or other employment issues or a health epidemic [added: or pandemic] negatively affects any of these facilities, it would significantly affect our ability to manufacture or sell our products and source components and would harm our business.

Possible impacts include work and equipment stoppages and damage to or closure of our facilities, or those of our suppliers or [removed: customers, for an indefinite period of time.]

Climate change has in the past and is expected to continue to increase the incidence and severity of certain natural disasters, including [removed: wildfires] [added: wildfires, floods] and [added: other] adverse weather events.

The loss of our key management, staff and skilled [removed: employees;] [added: employees or] the inability to hire and develop new [removed: employees; or decisions to realign our business] [added: employees] could negatively impact our business prospects.

Changes in our key management team [added: have resulted in and] may [added: in the future] result in loss of continuity, loss of accumulated knowledge, departure of other key employees, disruptions to our operations and inefficiency during transitional periods.

Our ability to hire and retain employees also depends on our ability to build and maintain [removed: a diverse and] [added: an] inclusive workplace [removed: culture] [added: culture, provide opportunities for career development] and [removed: to] fund competitive compensation and benefits, each of which contribute to being viewed as an employer of choice.

We believe malicious cybersecurity acts are increasing in number and that cybersecurity threat actors are increasingly organized and well-financed or supported by state [removed: actors,] [added: actors] and are developing increasingly sophisticated systems and means to not only infiltrate information systems, but also to evade detection or to obscure their activities.

Geopolitical tensions or conflicts may [added: also] create heightened risk of cybersecurity incidents.

Compromises of our infrastructure, information systems or products could also cause our customers and other affected third parties to suffer loss or misuse of proprietary or confidential information, IP, or sensitive or personal [removed: information,] [added: information] and could harm our relationships [added: with customers and other third parties and subject us to liability.]

Our business liability insurance may be [removed: inadequate] [added: inadequate,] or future coverage may be unavailable on acceptable terms, which could negatively impact our operating results and financial condition.

Any of [removed: the above] [added: these] factors could [removed: cause the Separation (or the failure to execute the Separation) to] have a material adverse effect on our business, financial condition, results of [removed: operations] [added: operations, cash flows,] and the [removed: trading] price of our common [removed: stock and/or other securities.][added: stock.]

[removed: If] [added: In addition, following] the [removed: Separation is completed,] [added: Separation,] we [removed: will be] [added: are] a smaller and [removed: less-diversified company and may be] [added: less diversified company, which could make us] more vulnerable to changing market conditions.

[removed: We rely substantially on] [added: Our] strategic relationships [removed: with various partners, including Kioxia, which subjects] [added: subject] us to risks and uncertainties that could harm our business.

We have entered into and expect to continue to enter into strategic relationships with various partners for product development, manufacturing, sales growth and the supply of technologies, components, equipment and materials for use in our product design and [removed: manufacturing, including our business ventures with Kioxia.][added: manufacturing.]

Our strategic [removed: relationships, including Flash Ventures,] [added: relationships] are subject to various risks that could harm the value of our investments, our revenue and costs, our future rate of spending, our technology plans and our future growth opportunities.

For example, [removed: for our Flash business,] in 2024 and 2023, we incurred [removed: $252] [added: $155] million and [removed: $296] [added: $201] million of charges for unabsorbed manufacturing overhead costs as a result of the reduced utilization of our manufacturing capacity, respectively.

[removed: Our strategic relationships are subject to additional risks that could harm our business, including, but not limited to, the following: failure by our strategic partners to comply with applicable laws or employ effective internal controls; difficulties and] delays in product and technology development at, ramping production at, and transferring technology to, our strategic partners; declining financial performance of our strategic partners, including failure by our strategic partners to timely fund capital investments with us or otherwise meet their commitments, including the payment of amounts owed to us or third parties when due; losing the rights to, or ability to independently manufacture, certain technology or products being developed or manufactured by strategic partners, including as a result of any of them being acquired by another company, filing for bankruptcy or experiencing financial or other losses; a bankruptcy event involving a strategic partner, which could result in [added: structural changes to or termination of the strategic partnership; and changes in tax or regulatory requirements, which may necessitate changes to the agreements governing our strategic partnerships.]

We participate in a highly competitive industry that is subject to [removed: declining] [added: variations in] average selling prices [removed: (“ASPs”), volatile] [added: (“ASPs”) and] demand, [removed: rapid] technological change and [removed: industry consolidation, as well as] lengthy product qualifications, all of which can negatively impact our business.

Demand for and prices of our products are influenced by, among other factors, the actual and projected growth of data to be stored, the [added: spending plans of our large hyperscale customers, the] balance between supply and demand in the storage market, [removed: including the effects of new fab capacity,] macroeconomic [removed: factors,] [added: factors (such as tariffs and actual or perceived threat of recessions),] business conditions, the emergence or growth of new or existing technologies (including AI), technology transitions and other actions taken by us or our competitors.

The storage market has [removed: recently] [added: in the past] experienced, and may [removed: continue to] [added: in the future] experience, periods of excess capacity leading to [removed: liquidation of excess inventories,] [added: our factories running below the desired utilization levels, resulting in us taking underutilization charges,] inventory [removed: write-downs, significant] [added: write-downs and] reductions in [removed: ASPs and] [added: ASPs, all of which lead to] negative impacts on our revenue and gross [removed: margins and volatile product life cycles that harm our ability to recover the cost of product development.][added: margins.]

[removed: Rapid] [added: Further,] technological changes [removed: often] [added: can] reduce the volume and profitability of sales of existing [removed: products and increase the risk of inventory obsolescence and write-downs.][added: products.]

We may also have difficulty effectively competing with manufacturers benefiting from governmental investments and may be subject to increased complexity and reduced efficiency in our supply chain as a result of governmental efforts to promote domestic [removed: semiconductor industries] [added: technologies] in various jurisdictions.

If we fail to adapt to or implement new [removed: technologies,] [added: technologies (including the transition to areal density recording technologies that use heat-assisted magnetic recording (“HAMR”) technology to increase HDD capacities),] if we fail to quickly and cost-effectively develop new products that meet the specifications and requirements intended or desired by our customers or if technology transitions negatively impact our existing product roadmaps, our business may be harmed.

In addition, if our customers choose to delay transition to new technologies, if demand for the products that we develop is lower than expected or if the supporting [added: technologies to implement these new technologies are not available, we may be unable to achieve the cost structure required to support our profit objectives or may be unable to grow or maintain our market position.]

We experience [added: variability in our] sales [removed: seasonality] and [removed: cyclicality,] [added: cyclicality in our industry,] which could cause our operating results to fluctuate.

In addition, accurately forecasting demand [removed: has become more] [added: is] difficult, which could harm our business.

Changes in [removed: seasonal] [added: their demand patterns] and [added: in] cyclical supply and demand patterns have made it, and could continue to make it, [removed: more] difficult for us to forecast demand.

As a result of the number and complexity of these factors, accurately forecasting demand has been and continues to be [removed: increasingly] difficult for us, our customers and our suppliers.

Further, [removed: for many] [added: while most] of our [removed: OEM] [added: revenue is derived from] customers [removed: utilizing] [added: with whom we have long-term agreements and from whom we require firm order commitments, a smaller number of our other customers utilize] just-in-time [removed: inventory,] [added: inventory; from these customers,] we do not generally require firm order commitments and instead receive a periodic forecast of requirements, which may prove to be inaccurate.

As forecasting demand [removed: becomes more] [added: remains] difficult, the risk that our forecasts are not in line with demand [removed: increases.][added: persists.]

This has caused, and may in the future cause, our forecasts to exceed actual market demand, resulting in periods of product oversupply, excess inventory, underutilization of manufacturing capacity and price decreases, which has impacted and could further impact our sales, ASPs and gross margin or require us to incur [removed: additional] inventory write-downs or [removed: additional] charges for unabsorbed manufacturing overhead, thereby negatively affecting our operating results and our financial condition.

We have made and expect to continue to make acquisitions and [removed: divestitures,] [added: divestitures (such as the recent Separation)] and engage in cost saving measures.

Changes in U.S. trade policy and the impact of tariffs and retaliatory actions may have a material adverse effect on our business and results of operations.

Our business, financial condition and results of operations may be adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the United States or other governments.

For example, the United States has announced changes to its trade policies, including increasing tariffs on imports, in some cases significantly.

These actions have caused substantial uncertainty and have also resulted in retaliatory measures on U.S. goods and exports to the United States.

Any imposition of or increase in tariffs may increase the cost of importing our products or the costs for materials or components used in our products, which would increase our costs unless we are able to implement actions to offset these costs, such as leveraging tariff exemptions where possible, optimizing our supply chain, sourcing from alternative suppliers, or passing the costs to our customers through tariff surcharges or increased prices.

There can be no assurance that we will be able to successfully offset or mitigate any resulting increase in our costs.

If we are unable to pass on any cost increases or if supply and demand conditions will not support price increases for our products, our revenue and gross margin would be negatively impacted.

In addition, retaliatory actions by other countries in response to U.S. trade policy could increase prices for our products, negatively affect demand for our products or restrict our ability to manufacture our products.

Tariffs or other trade restrictions may also lead to increased costs for our customers, declining consumer confidence, significant inflation and diminished expectations for the economy, as well as ultimately reduced demand for our products.

Such conditions could have a material adverse impact on our business, results of operations and cash flows.

In addition, tariff actions by the United States and retaliatory actions by other countries have caused, and may in the future cause, significant disruption and volatility in the financial markets, which could adversely affect the availability, terms and cost of capital, including to refinance our existing debt, and which in turn could reduce our cash flows and harm our business.

Changes in tariffs and trade restrictions can be announced with little or no advance notice.

The adoption and expansion of tariffs or other trade restrictions, increasing trade tensions and retaliatory actions, or other changes in governmental policies related to tariffs, trade agreements or trade policies are difficult to predict, which makes risks difficult to anticipate and mitigate.

If we are unable to navigate further changes in U.S. or international trade policy, it could have a material adverse impact on our business, financial condition and results of operations.

customers, for an indefinite period of time.

Additionally, as AI capabilities continue to evolve and become more readily available, we may face increasingly sophisticated cyberattacks that leverage AI technologies.

These may include highly convincing phishing or social engineering attacks that use AI-generated deepfakes, the exploitation of vulnerabilities in electronic identity validation security programs via AI-replicated images or voices, or the inadvertent incorporation of malicious or hallucinated content generated by AI tools into our systems or those of our customers or partners.

Separately, the AI technologies that we employ for business purposes may be vulnerable to prompt-injection or other

adversarial attacks, which could result in unauthorized access to or leakage of sensitive information.

We are subject to risks related to the separation of Sandisk, our former Flash business, into an independent public company.

On February 21, 2025, we completed our planned spin-off of our Flash business unit from our remaining HDD business (which we refer to as the Separation), as a result of which Sandisk became an independent public company.

There can be no assurance that the anticipated benefits of the Separation will be realized, or that the costs or dis-synergies of the Separation (including costs of related restructuring transactions) will not exceed the anticipated amounts, in each case in the monetary or other amounts or within the timeframes that were anticipated.

The Separation has and may continue to impose challenges on us and our business, such as potential business disruption; the diversion of management time on matters relating to the Separation; the impact on our ability to retain talent; and potential impacts on our relationships with our customers, suppliers, employees,

and other counterparties.

In connection with the Separation, we and Sandisk entered into various agreements to effect the Separation and provide for the temporary framework of the relationship between us and Sandisk following the Separation, including, among others, a separation and distribution agreement, a tax matters agreement, and a transition services agreement.

Performance under these agreements or other related conditions outside of our control could materially affect our operations and future financial results.

We retained an equity interest in Sandisk in connection with the Separation, of which we divested a portion in June 2025 in a debt-for-equity exchange.

As of June 27, 2025, we retain approximately 7 million shares of common stock in Sandisk.

We cannot predict the trading price of shares of Sandisk’s common stock and the market value of the Sandisk shares is subject to market volatility and other factors outside of our control.

We expect to monetize our remaining stake in Sandisk within one year from the Separation Date, but there can be no assurance regarding the timing of, or timeframe over which, such divestiture or divestitures may occur, or the amount of proceeds received by us in connection with any such divestitures.

In addition, while the Separation is intended to be tax-free to our stockholders for U.S. federal income tax purposes, there is no assurance that the Separation will qualify for this treatment.

If the Separation is ultimately determined to be taxable, Western Digital, Sandisk, or our stockholders could incur income tax and/or other liabilities that could be significant.

Additionally, the impact of generative AI on the storage and data management markets and regulation thereof is still unfolding and could evolve unpredictably, and it is difficult to accurately forecast related demands.

We also experience competition from other companies that produce alternative storage technologies such as flash memory, particularly in our legacy markets where we participate with our lower capacity, smaller form factor HDDs.

Flash-based solutions also target our larger addressable market, i.e., Cloud.

While our ASPs tend to be relatively stable, we may experience periods during an industry downturn when we face adverse headwinds to our ASPs.

Additionally, our gross margin may face downward pressure if we are unable to migrate our product mix to the higher capacity needs of our customers and/or to reach the desired manufacturing yield in our production.

Our gross margin could also face pressure if we are unable to achieve the desired manufacturing yields when we ramp our new technologies.

In addition, if we fail to effectively manage our government relationships in various jurisdictions in which we operate, we may experience missed opportunities (including incentives and investments), unfavorable policy outcomes or operational inefficiencies, any of which would put us at a competitive disadvantage.

As a result of the Separation, there is increased revenue concentration in our Cloud end market and among our top customers.

products.

We depend upon Kioxia to obtain and maintain sufficient property, business interruption and other insurance for Flash Ventures.

If Kioxia fails to do so, we could suffer significant unreimbursable losses, and such failure could also cause Flash Ventures to breach various financing covenants.

Public health crises have had, and could in the future have, a negative effect on our business.

Public health crises have in the past negatively impacted, and may in the future negatively impact, our workforce and operations, as well as those of our strategic partners, customers, suppliers and logistics providers.

The impacts we experienced in connection with the COVID-19 pandemic included temporary closures of certain manufacturing facilities; under-absorbed overhead; increased logistics, component and other costs; decreased demand for our products; and manufacturing challenges.

Future outbreaks of infectious disease or other public health crises may have similar impacts.

The effects of public health crises are uncertain and difficult to predict, but may also include disruptions to our supply chain, our operations or those of our strategic partners, customers or suppliers; deterioration of worldwide credit markets, which may limit our ability or increase our cost to obtain external financing and result in a higher rate of losses on our accounts receivable; volatility in financial markets, which may be extreme and could harm our ability to access the financial markets on acceptable terms or at all; increased data security and technology risks related to increased remote work; and reduced productivity or other disruptions of our operations.

The degree to which any future public health crises ultimately impact our business will depend on many factors beyond our control, which are highly uncertain and cannot be predicted at this time.

Additionally, uncertainty about business realignment actions or the structure and organization of our business as a result of our ongoing separation of our HDD and Flash business units into two independent public companies could negatively impact our ability to recruit and retain key staff and skilled employees.

We have and may continue to put retention arrangements in place for key employees to address the uncertainty about our business separation.

When these retention payments are earned, we may suffer further attrition.

with customers and other third parties and subject us to liability.

The proposed separation of our HDD and Flash business units into two independent public companies is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all.

On October 30, 2023, we announced that our Board of Directors had completed its review of potential strategic alternatives and had unanimously approved pursuing a plan to separate the Flash business unit from our remaining HDD business (the “Separation”).

The Separation is intended to be structured in a tax-free manner and we continue to drive towards completing the work required to separate the businesses by the end of calendar year 2024.

No assurance can be given as to whether the Separation will occur, when any such transaction will be approved or when any separation may be completed.

Furthermore, while we are working toward the Separation, the specific assets, liabilities and entities to be separated are still being finalized and may change.

We may determine to abandon any efforts with respect to the Separation at any time for any reason.

The form or other terms of the Separation may change over time, including with respect to the scope of the businesses to be separated or retained by us.

The final determination to separate is subject to Board approval, the execution of definitive documentation, receipt of opinions or rulings as to the tax-free nature of the Separation and satisfaction of customary conditions, including the effectiveness of appropriate filings with the SEC, the completion of audited financial statements and the availability of financing.

Additionally, no assurance can be given that the intended tax treatment will be achieved or that shareholders will not incur substantial tax liabilities in connection with the Separation.

The failure to satisfy any of these conditions could delay the completion of the Separation for a significant period of time or prevent it from occurring at all.

Various factors, including changes in the competitive conditions of our markets, changes in financial markets and economic conditions, failure to obtain any third party consents that may be required for the Separation, delays in obtaining tax opinions or rulings, material or unanticipated tax liability for our shareholders, us, and/or the Flash business unit, and other challenges in executing the separation of the two businesses, could delay or prevent the completion of the Separation or cause it to occur on terms or conditions that are different or less favorable than expected.

Further, our Board of Directors could decide, either because of a failure of conditions or because of market or other factors, to abandon the Separation.

Our review of the Separation has and will continue to involve significant time, expense and resources and could disrupt or adversely affect our business.

Executing the Separation has required and will continue to require significant time and attention from our senior management and employees and may divert their attention from operating and growing our business in ways that could adversely affect our business, financial condition and results of operations.

Our employees may also be distracted due to uncertainty about their future roles with the separated companies, and customers or suppliers could delay or defer decisions or may end their relationships with us.

In addition, we have incurred and will continue to incur expenses in connection with our strategic review and the consideration of the Separation and expect that the process of reviewing the Separation and executing the Separation, if any, will be time-consuming and involve significant additional costs and expenses, which may not yield a benefit if the Separation is not completed.

If pursued, we will also incur ongoing costs and dis-synergies in connection with, or as a result of, the Separation and related restructuring transactions, including costs of operating as independent, publicly traded companies that the two businesses will no longer be able to share.

The Separation may not achieve the anticipated benefits and could expose us to new risks, including with respect to our existing indebtedness and future capital structure.

We may not realize any strategic, financial, operational or other benefits from the Separation.

We cannot predict with certainty if or when anticipated benefits will occur or the extent to which they will be achieved.

If the Separation is completed, our operational and financial profile (including our capital structure) will change and we will face new risks.

While we believe that the Separation will position each company to better unlock its full standalone long-term potential, we cannot assure you that following the Separation we will be successful.

Further, there can be no assurance that the combined value of the shares of the two resulting companies will be equal to or greater than what the value of our common stock would have been had the Separation not occurred.

In addition, following the completion of the Separation or any other disposition of our Flash business unit, we will not be able to rely on the earnings, assets or cash flow of the Flash business unit, and that business will not provide funds to finance our working capital or other cash requirements.

As a result, our ability to service our debt may be adversely affected.

We cannot predict the prices at which our common stock may trade after the Separation or the effect of the Separation on the trading prices of our common stock.

The Separation will be subject to numerous conditions, including the availability of financing.

The following discussion and analysis contains forward-looking statements within the meaning of the federal securities [removed: laws,] [added: laws] and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results.

You should read this information in conjunction with the Consolidated Financial Statements and the notes thereto included in Part II, Item [removed: 8] [added: 8, *Financial Statements and Supplementary Data*,] of this Annual Report on Form 10-K.

See also “Forward-Looking Statements” immediately prior to Part I, Item [removed: 1] [added: 1, *Business*,] of this Annual Report on Form 10-K.

We are a leading developer, manufacturer, and provider of data storage devices [added: and solutions] based on [removed: both HDD and NAND flash technologies.][added: hard disk drive (“HDD”) technology.]

Our broad portfolio of technology and products addresses our [added: customers’ storage needs through] multiple end markets: “Cloud,” “Client” and “Consumer”.

Through the Client end market, we provide our [removed: OEM] [added: original equipment manufacturer (“OEM”)] and channel customers a broad array of high-performance HDD [removed: and Flash] solutions across [removed: personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment,] [added: desktop] and [removed: industrial spaces.][added: notebooks.]

The Consumer end market [removed: is highlighted by our] [added: provides a] broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast points of presence around the world.

Fiscal years [added: 2025,] 2024, [removed: 2023,] and [removed: 2022,] [added: 2023,] which ended on June [added: 27, 2025, June] 28, 2024, [added: and] June 30, 2023, [removed: and July 1, 2022,] respectively, each comprised 52 weeks, with all quarters presented consisting of 13 weeks.

We believe the [removed: separation will] [added: Separation] better [removed: position] [added: positions] each business unit to execute innovative technology and product development, capitalize on unique growth opportunities, extend respective leadership positions, [removed: and] operate more efficiently with distinct capital [removed: structures.][added: structures, and pursue capital allocation strategies that maximize long-term shareholder value.]

As [removed: disclosed in previous periods,] [added: previously disclosed,] we had [removed: previously] reached a final agreement with the [added: U.S.] Internal Revenue Service [removed: (“IRS”)] [added: (the “IRS”)] and received notices of deficiency with respect to years 2008 through [removed: 2012] [added: 2012,] and in February 2024, we also reached a final agreement for resolving the notices of proposed adjustments with respect to years 2013 through 2015.

During the [removed: twelve months] [added: year] ended June [removed: 28, 2024,] [added: 27, 2025,] we made payments aggregating [removed: $524] [added: to $162] million for tax and interest with respect to years 2008 through [removed: 2012] [added: 2015] and have [removed: a] [added: no] remaining liability [removed: of $185 million] as of June [removed: 28, 2024] [added: 27, 2025] related to all years from 2008 through 2015.

Additional information [added: regarding these settlements and related tax matters] is provided in [removed: our discussion in our “Results of Operations – *Income Tax Expense,*” and the “Short- and Long-term Liquidity – *Unrecognized Tax Benefits*” section below, and in] Part II, Item 8, Note 13, *Income [removed: Tax Expense*,] [added: Taxes*,] of the Notes to [removed: the] Consolidated Financial Statements [added: included] in this Annual Report on Form 10-K.

[removed: *Financing Activities*][added: | Financing activities | | | (1,612) | | | | | | 187 | | | | | | 875 | | |]

[removed: On November 3, 2023, we] [added: The Company] issued $1.60 billion aggregate principal amount of convertible senior [removed: notes,] [added: notes in November 2023,] which bear interest at an annual rate of 3.00% and mature on November 15, [removed: 2028, unless earlier repurchased, redeemed or converted] [added: 2028] (the “2028 Convertible Notes”).

[removed: Additional information] [added: Information] regarding our indebtedness, including the principal repayment terms, interest rates, covenants and other key terms of our outstanding indebtedness, and additional information on the terms of our convertible preferred shares is included in Part II, Item 8, Note [removed: 7, *Debt,*] [added: 8, *Debt*, and Note 12, *Shareholders’ Equity and Convertible Preferred Stock*,] of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

[removed: See] [added: For additional information, please see] Part I, Item 1A, *Risk Factors*, [removed: of] [added: included in] this Annual Report on Form [removed: 10-K for more information regarding the risks we face as a result of macroeconomic conditions, and supply chain disruptions.][added: 10-K.]

*Summary Comparison of [removed: 2024, 2023] [added: 2025, 2024] and [removed: 2022*][added: 2023*]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2024] [added: 2025] | | | | | | | | | | | | [removed: 2023] [added: 2024] | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | | | | | | | | | | | | | | | |

| Litigation matter | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 291] [added: (198)] | | | | | | [removed: 2.2] [added: (2.1)] | | | | | | [removed: —] [added: 291] | | | | | | [removed: —] [added: 4.6] | | | | | | | | | | | | — | | | | | | — | | |

| Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 39] [added: 45] | | | | | | [removed: 0.3] [added: 0.5] | | | | | | [removed: 24] [added: 33] | | | | | | [removed: 0.2] [added: 0.5] | | | | | | | | | | | | [removed: 6] [added: 19] | | | | | | [removed: —] [added: 0.3] | | |

| Other [removed: income,] [added: income (expense),] net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 34] [added: (20)] | | | | | | [removed: 0.3] [added: (0.2)] | | | | | | [removed: 23] [added: 45] | | | | | | [removed: 0.2] [added: 0.7] | | | | | | | | | | | | [removed: 78] [added: (10)] | | | | | | [removed: 0.4] [added: (0.2)] | | |

[removed: (1)Percentage] [added: (1)Percentages] may not total due to rounding.

| | | | [removed: 2024] | | | | | | [removed: 2023] | | | | | | [removed: 2022] [added: 2025] | | | [added: | | | 2024 | | | | | | 2023 | | |]

| Gross [removed: profit: | | | | | |] [added: profit] | | | [added: 1,941] | | | | | | [added: 1,002] | | |

| | | | | | | | | | | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | |

| Europe, Middle East and Africa | | | | | | | | | | | | | | | [removed: 2,130] [added: 1,536] | | | | | | [removed: 2,100] [added: 1,067] | | | | | | [removed: 2,872] [added: 1,175] | | |

The increase in [removed: exabytes] [added: units] sold was driven by [removed: an increase in] [added: higher] shipments of our high-capacity enterprise [removed: drives.][added: products.]

The [removed: decline] [added: increase] in [removed: ASPs] [added: average selling price] per [removed: gigabyte] [added: unit] was primarily due to a shift in [removed: the] product mix to [removed: larger] [added: higher] capacity drives.

Cloud revenue increased [removed: 2%] [added: by 6%] in 2024 compared to 2023, primarily driven by a [removed: 12%] [added: 1%] increase in [removed: exabytes sold, largely offset by] [added: units sold and] a [removed: 7% decline] [added: 16% increase] in [removed: ASPs] [added: average selling price] per [removed: gigabyte.][added: unit.]

The increase [removed: in exabytes sold] was [added: also] driven by [added: a 15% increase in units sold as a result of] higher shipments of our high-capacity enterprise [removed: HDD products.][added: products stemming from data center expansions.]

[removed: Client] [added: Cloud] revenue increased [removed: 7%] [added: by 65%] in [removed: 2024] [added: 2025] compared to [removed: 2023,] [added: 2024,] primarily driven by a [removed: 6%] [added: 36%] increase in [removed: exabytes] [added: units] sold and a [removed: 2%] [added: 20%] increase in [removed: ASPs] [added: average selling price] per [removed: gigabyte.][added: unit.]

For [removed: 2024, 2023] [added: 2025, 2024] and [removed: 2022,] [added: 2023,] our top 10 customers accounted for [removed: 39%, 43%] [added: 68%, 55%] and [removed: 45%,] [added: 56%,] respectively, of our net revenue.

For [removed: each of 2024, 2023] [added: 2024] and [removed: 2022,] [added: 2023,] no single customer accounted for 10% or more of our net revenue.

For [removed: 2024, 2023] [added: 2025, 2024] and [removed: 2022,] [added: 2023,] these programs represented [removed: 15%, 20%] [added: 10%, 11%] and [removed: 17%,] [added: 18%,] respectively, of gross [removed: revenues.][added: revenue.]

The amounts attributed to our sales incentive and marketing programs generally vary according to several [removed: factors] [added: factors,] including industry conditions, list pricing strategies, seasonal demand, competitor actions, channel mix and overall availability of products.

[removed: Consolidated gross] [added: Gross] profit increased [removed: $1.06 billion] [added: by $382 million] in 2024 compared to 2023.

The increase was largely due to higher [removed: revenues from both Flash and HDD,] [added: revenues,] cost reductions due to [removed: cost] efficiencies achieved through improved manufacturing [removed: operations and] [added: operations,] cost-saving actions, and a more favorable product mix.

The increase also reflected [removed: charges of approximately $407 million ($252 million in Flash and $155 million] [added: a reduction] in [removed: HDD)] [added: charges] for unabsorbed manufacturing overhead costs as a result of the reduced utilization of our manufacturing capacity [added: to approximately $155 million] in 2024, [removed: compared to] [added: from] approximately [removed: $497] [added: $200] million of such costs [removed: ($296 million] in [removed: Flash and $201 million in HDD) in] 2023.

[removed: Consolidated gross] [added: Gross] margin increased [removed: 7.3] [added: 5.9] percentage points in 2024 compared to 2023, with approximately [removed: 2] [added: 1] percentage [removed: points] [added: point] of the increase due to the [removed: lower net charges] [added: reduction] in [added: unabsorbed manufacturing overhead costs from] the [removed: current period] [added: prior year] and the remainder driven by the [removed: same] factors as noted above.

Selling, general and administrative (“SG&A”) expense decreased [removed: $142] [added: by $158] million or [removed: 15%] [added: 22%] in [removed: 2024] [added: 2025] compared to [removed: 2023.][added: 2024.]

We leverage our capability in the HDD industry primarily for the cloud and hyperscale data center markets.

HDDs are critical components in the worldwide data infrastructure market, powering the digital economy.

HDDs provide reliable, cost-effective, high-capacity storage needs for a wide range of applications, ranging from cloud data centers, enterprise storage systems, edge computing, video surveillance to client and consumer.

Fiscal year 2026, ending on July 3, 2026 will be comprised of 53 weeks, with the first quarter consisting of 14 weeks.

On February 21, 2025 (the “Separation Date”), we completed the separation of our HDD and Flash business units (the “Separation”) to create two independent public companies, with Western Digital focusing on our existing HDD business and Sandisk Corporation (“Sandisk”), formerly a wholly-owned subsidiary of the Company, holding the Flash business.

The Separation was effected through a pro rata distribution of 80.1% of the outstanding shares of Sandisk common stock to holders of the Company’s common stock as of February 12, 2025, the record date for the distribution.

The Company did not issue fractional shares of Sandisk common stock in connection with the distribution.

Sandisk is now an independent public company, and Sandisk common stock commenced trading “regular way” under the symbol “SNDK” on the Nasdaq Stock Market LLC (“Nasdaq”) on February 24, 2025, which was the next trading day following the distribution date.

The Company continues to trade on Nasdaq under the symbol “WDC” following the Separation.

Following the Separation, the Company no longer consolidates Sandisk within the Company’s financial results.

As part of the Separation, the Company retained 28.8 million shares of Sandisk common stock, or a 19.9% stake.

During the quarter ended June 27, 2025, the Company disposed of 21.3 million shares of Sandisk common stock, along with $4 million in cash, in a tax-free exchange for $800 million principal amount of the Company’s term loan A-3.

The Company expects to monetize its remaining stake in Sandisk within one year from the Separation Date.

Information provided herein is presented on a continuing operations basis to reflect the impact of the Separation.

*Macroeconomic Conditions*

The United States has recently announced changes to its trade policy, including increasing tariffs on imports, in some cases significantly.

Several of these recent tariff actions have been followed by announcements of limited exemptions and temporary pauses.

These actions have caused substantial uncertainty and have also resulted in retaliatory measures on U.S. goods.

Our business and results of operations were not materially impacted in fiscal 2025 as a result of the recent tariff actions.

We are actively monitoring developments and plan to leverage tariff exemptions where possible and will take other actions as appropriate to offset any resulting increase in the cost of importing our products or the costs for materials or components in our products, including optimizing our supply chain, sourcing from alternative suppliers, or passing the costs to our customers through tariff surcharges, or increased prices.

There can be no assurance that we will be able to successfully offset or mitigate any resulting increase in our costs.

In addition, the impact of the tariff actions on our customers, retaliatory measures by other countries in response to U.S. trade policy and any resulting decline in consumer confidence, significant inflation and diminished expectations for the economy could reduce demand for our products and adversely affect our business, financial condition and results of operations.

In fiscal 2025, we saw an improvement in the supply and demand dynamic relative to the prior year, and we anticipate that digital transformation, including the AI data-cycle, will drive improved market conditions in the long term.

However, macroeconomic factors such as tariffs, inflation, changes in interest rates, and recession concerns can affect demand for our products.

As an example, in fiscal 2024, we and our industry experienced a supply-demand imbalance, which led to reduced shipments, negatively impacted pricing, and resulted in business realignment charges and charges for unabsorbed manufacturing overhead costs due to the underutilization of facilities as we temporarily scaled back production and took other actions to align our operations to the market at the time.

We will continue to actively monitor developments impacting our business and may take future responsive actions that we determine to be in the best interest of our business and stakeholders.

*Capital Allocation Actions*

We have taken significant actions to deleverage our business and to initiate programs to return capital to our investors.

In February 2025, in connection with the Separation, we amended the loan agreement governing our revolving credit facility maturing in January 2027 (the “2027 Revolving Credit Facility”) and Term Loan Facility (as defined below), dated as of January 7, 2022 (as amended, the “Loan Agreement”) to, among other changes, permit the Separation, provide for the issuance of a new $2.51 billion Term Loan A-3 maturing in January 2027 (the “Term Loan A-3”) in a noncash exchange to replace our previously existing Term Loan A-2 (the “Term Loan A-2” and, together with the Term Loan A-3, the “Term Loan Facility”); facilitate a subsequent exchange of a portion of the Term Loan A-3 for shares of Sandisk retained by us at the Separation; and reduce the aggregate commitments under the 2027 Revolving Credit Facility from $2.25 billion to $1.25 billion.

In April 2025, we redeemed, at our election, $1.80 billion aggregate principal amount of our 4.75% senior unsecured notes due 2026 (the “2026 Notes”) at par plus accrued interest.

In June 2025, we settled $800 million principal amount of our Term Loan A-3 through an exchange of 21.3 million shares of Sandisk common stock held by us and $4 million in cash paid by us.

These actions, along with scheduled principal payments made on our term loans, reduced the principal amount of our debt by $2.78 billion during fiscal 2025.

On April 29, 2025, our Board of Directors authorized the adoption of a quarterly cash dividend program.

Under the cash dividend program, holders of our common stock will receive dividends when and as declared by our Board of Directors.

During the year ended June 27, 2025, we paid cash dividends of $0.10 per share of our outstanding common stock, totaling $36 million, including payment to holders of our Series A Preferred Stock in accordance with their participation rights.

Subsequent to year-end, on July 29, 2025, our Board of Directors declared a cash dividend of $0.10 per share of our common stock, which will be paid on September 18, 2025 to our shareholders of record as of the close of business on September 4, 2025.

On May 9, 2025, our Board of Directors authorized a share repurchase program for the repurchase of up to $2.0 billion of our common stock.

For the year ended June 27, 2025, we repurchased 2.8 million shares for a total cost of $149 million.

The remaining amount available to be repurchased under our share repurchase program as of June 27, 2025 was $1.85 billion.

Repurchases under the share repurchase program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan.

With a differentiated innovation engine driving advancements in storage and semiconductor technologies, our broad and ever-expanding portfolio delivers powerful HDD and Flash storage solutions for everyone from students, gamers, and home offices to the largest enterprises and public clouds to capture, preserve, access, and transform an ever-increasing diversity of data.

On October 30, 2023, we announced that our Board of Directors had completed its strategic review of our business and, after evaluating a comprehensive range of alternatives, authorized us to pursue a plan to separate our HDD and Flash business units to create two independent, public companies.

The completion of the planned separation is subject to certain conditions, including final approval by our Board of Directors.

Significant effort is underway and extensive progress has been made with respect to the separation as we continue to drive towards completing the work required to separate the businesses by the end of calendar year 2024.

Macroeconomic factors such as inflation, higher interest rates and recession concerns had softened demand for our products in recent years, with certain customers reducing purchases as they adjusted their production levels and right-sized their inventories.

As a result, we and our industry experienced a supply-demand imbalance, which resulted in reduced shipments and negatively impacted pricing.

To adapt to these conditions, since the beginning of 2023, we have been implementing measures to reduce operating expenses, and to proactively manage supply and inventory to align with demand and improve our capital efficiency while continuing to deploy innovative products.

These actions have enabled us to scale back on capital expenditures, consolidate production lines and reduce production bit growth.

In 2024 and 2023, these actions have resulted in incremental charges for employee termination, asset impairment and other charges as well as charges for unabsorbed manufacturing overhead costs in HDD and Flash as a result of the underutilization of facilities as we temporarily scaled back production.

In the latter half of 2024, we began to see an improvement in the supply and demand dynamic, leading to improved revenues.

The increased demand resulted in improved pricing and gross margin across our segments and end markets compared to 2023.

We anticipate that digital transformation, including AI data-cycle, will continue driving improved market conditions in the near- and long-term for data storage, encompassing both HDD and Flash technologies.

Leveraging our expertise and innovation in both areas, we believe we are well-positioned to capitalize on this improved market condition.

We expect to pay any remaining balance with respect to this matter within the next twelve months.

We received net proceeds of approximately $1.56 billion after issuance costs.

Contemporaneously with the issuance of the 2028 Convertible Notes, we entered into individually negotiated transactions with certain holders of our existing 1.50% convertible senior notes due February 1, 2024 (the “2024 Convertible Notes”) to repurchase approximately $508 million aggregate principal amount of such notes at an immaterial discount using net proceeds from the offering of the 2028 Convertible Notes.

In connection with the issuance of the 2028 Convertible Notes, we also used approximately $155 million of the net proceeds from the offering to pay the cost of entering into capped call contracts with a cap price of approximately $70.26 to hedge the potential dilution impact of the conversion feature.

On February 1, 2024, we used a portion of the remaining net proceeds from the offering of the 2028 Convertible Notes to settle the remaining 2024 Convertible Notes in accordance with their original terms for an aggregate cash principal payment of $592 million plus interest.

During 2024, we drew and repaid $600 million principal amount (the “Delayed Draw Term Loan”) under a loan agreement we entered into in January 2023 and amended in June 2023.

Proceeds from this loan were primarily used for payments on our tax liability to the IRS for the years 2008 through 2012.

*Agreement to Sell a Majority Interest in a Subsidiary*

In March 2024, our wholly-owned subsidiary, SanDisk China Limited (“SanDisk China”) entered into an Equity Purchase Agreement to sell 80% of its equity interest in SanDisk Semiconductor (Shanghai) Co. Ltd. (“SDSS”), our indirect wholly-owned subsidiary, to JCET Management Co., Ltd. (“JCET”), a wholly-owned subsidiary of JCET Group Co., Ltd., a Chinese publicly listed company, thereby forming a joint venture between SanDisk China and JCET (the “Transaction”).

Closing of the Transaction is subject to the satisfaction or waiver of certain conditions, after which JCET will own 80% of the equity interest in SDSS, with SanDisk China owning the remaining 20%.

Following the closing, we expect to enter into various ancillary agreements, including (i) a shareholders agreement governing the joint venture relationships from and after the closing; (ii) a supply agreement (“Supply Agreement”) with the joint venture to supply us with certain flash-based products currently produced by SDSS, which may include flash memory cards, embedded flash products, and flash components; and (iii) an intellectual property license agreement granting SDSS certain intellectual property rights on a royalty-free basis for use in manufacturing products on our behalf for the term of and pursuant to the Supply Agreement.

*Sale-Leaseback*

In September 2023, we completed a sale and leaseback of our facility in Milpitas, California.

We received net proceeds of $191 million in cash and recorded a gain of $85 million on the sale.

We are leasing back the facility at an annual lease rate of $16 million for the first year, increasing by 3% per year thereafter through January 1, 2039.

The lease includes three 5-year renewal options and one 4-year renewal option for the ability to extend through December 2057.

*Asset Impairment and Contract Termination Costs*

In connection with the cost-saving actions described in “*Operational Update*” above, we reassessed our existing capacity development plans and made decisions during 2024 to cancel certain projects, including projects to expand capacity in our Penang, Malaysia facility.

This resulted in a $146 million impairment of existing construction in progress and other assets and recognition of $34 million for certain contract termination costs during the year ended June 28, 2024.

| Revenue, net | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 13,003 | | | | | 100.0 | | % | | | | $ | 12,318 | | | | | 100.0 | | % | | | | | | | | | | $ | 18,793 | | | | | 100.0 | | % |

| Cost of revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,058 | | | | | | 77.4 | | | | | | 10,431 | | | | | | 84.7 | | | | | | | | | | | | 12,919 | | | | | | 68.7 | | |

| Gross profit | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,945 | | | | | | 22.6 | | | | | | 1,887 | | | | | | 15.3 | | | | | | | | | | | | 5,874 | | | | | | 31.3 | | |

| Research and development | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,907 | | | | | | 14.7 | | | | | | 2,009 | | | | | | 16.3 | | | | | | | | | | | | 2,323 | | | | | | 12.4 | | |

| Selling, general and administrative | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 828 | | | | | | 6.4 | | | | | | 970 | | | | | | 7.9 | | | | | | | | | | | | 1,117 | | | | | | 5.9 | | |

| Employee termination, asset impairment, and other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 139 | | | | | | 1.1 | | | | | | 193 | | | | | | 1.6 | | | | | | | | | | | | 43 | | | | | | 0.2 | | |

| Business separation costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 97 | | | | | | 0.7 | | | | | | — | | | | | | — | | | | | | | | | | | | — | | | | | | — | | |

| Total operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,262 | | | | | | 25.1 | | | | | | 3,172 | | | | | | 25.8 | | | | | | | | | | | | 3,483 | | | | | | 18.5 | | |

For additional information, see Part II, Item 8, Note [removed: 5,] [added: 6,] *Fair Value Measurements and Investments,* and Note [removed: 6,] [added: 7,] *Derivative Instruments and Hedging Activities*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

We have performed sensitivity analyses for [removed: 2024,] [added: 2025] using a modeling technique that measures the change in the fair values arising from a hypothetical 10% adverse movement in the levels of foreign currency exchange rates relative to the U.S. dollar, with all other variables held constant.

The foreign currency exchange rates used in performing the sensitivity analyses were based on market rates in effect at June [removed: 28, 2024.][added: 27, 2025.]

The sensitivity analyses indicated that a hypothetical 10% adverse movement in foreign currency exchange rates relative to the U.S. dollar would result in a foreign exchange fair value loss of [removed: $248] [added: $75] million at June [removed: 28, 2024.][added: 27, 2025.]

During [removed: 2024, 2023] [added: 2025, 2024] and [removed: 2022,] [added: 2023,] total net realized and unrealized transaction and foreign exchange contract currency gains and losses were not material to our Consolidated Financial Statements.

As of June [removed: 28, 2024,] [added: 27, 2025,] our variable rate debt outstanding consisted of our Term Loan [removed: A-2,] [added: A-3,] which is based on various index rates as discussed further in Note [removed: 7,] [added: 8,] *Debt*, of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

As of June [removed: 28, 2024,] [added: 27, 2025,] the outstanding balance on our Term Loan [removed: A-2] [added: A-3] was [removed: $2.59 billion] [added: $1.65 billion,] and a 1% increase in the variable rate of interest would increase annual interest expense by [removed: $26] [added: $16] million.

[removed: Western Digital is] [added: We are] a leading developer, [removed: manufacturer] [added: manufacturer,] and provider of data storage devices and solutions based on [removed: both] hard disk drive [removed: and NAND flash technologies.][added: (“HDD”) technology.]

Our broad portfolio of technology and products addresses [added: our customers’ storage needs through] multiple end markets: “Cloud,” “Client” and [removed: “Consumer.”][added: “Consumer” and is comprised of the Western Digital® and WD® brands.]

Through the Client end market, we provide our original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance [removed: hard drive and flash] [added: HDD] solutions across [removed: personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment,] [added: desktop] and [removed: industrial spaces.][added: notebooks.]

We believe the [removed: separation will] [added: Separation] better [removed: position] [added: positions] each business unit to execute innovative technology and product development, capitalize on unique growth opportunities, extend respective leadership [removed: positions and] [added: positions,] operate more efficiently with distinct capital [removed: structures.][added: structures, and pursue capital allocation strategies that maximize long-term shareholder value.]

[removed: Founded in 1970 in Santa Ana, California,] Western Digital [added: was founded in 1970 and] is [removed: now] a Standard & Poor’s 500 (“S&P 500”) company headquartered in San Jose, California.

We have extensive customer, partner and channel relationships across [removed: a number of] [added: our] end markets and [removed: geography] [added: geographies] and [removed: have] a rich heritage of innovation and operational [removed: excellence, a wide range of intellectual property (“IP”) assets, broad research and development (“R&D”) capabilities and large-scale, efficient manufacturing supply chains.][added: excellence.]

The strong growth in the amount, value and use of data [removed: continues, creating] [added: continues to create] a global need for larger, faster and more capable storage solutions.

We are a customer-focused organization that has developed deep relationships with industry leaders to [removed: continue to] deliver innovative solutions to help users capture, store and transform data across a boundless range of applications.

With much of the world’s data stored on Western Digital products, our innovation powers the global technology ecosystem [added: — anchored in the cloud, and extending] from consumer devices to the [removed: edge, to the heart of] [added: edge — enabling] the [removed: cloud.][added: data-driven future, including AI and emerging applications.]

We have also built strong consumer [removed: brands] [added: brand recognition] with tools to manage vast libraries of personal content and to push the limits of what is possible for storage.

[removed: At Western Digital, we] [added: We] continue to transform ourselves to address the growth in data by providing what we believe to be the broadest range of storage technologies in the industry with a comprehensive product portfolio and global reach.

Our strengths in [removed: innovation] [added: innovation, areal density] and cost [removed: leadership, diversified product portfolio and broad routes to market] [added: leadership] provide a foundation upon which we are solidifying our position as an essential building block of the digital economy.

We believe there is tremendous market opportunity [removed: flowing from] [added: created by] the rapid global adoption of [removed: the] technology [removed: architecture] built with cloud [removed: infrastructure tied to intelligent endpoints all] [added: infrastructure,] connected [removed: by] [added: intelligent devices, and] high-performance networks.

The increase in computing complexity and advancements in [removed: artificial intelligence (“AI”),] [added: AI,] along with growth in cloud computing applications, connected mobile devices and Internet-connected products and edge devices is driving [removed: unabated] [added: rapid] growth in the volume of digital content to be stored and used.

[removed: *Hard Disk Drives.*] HDD products provide non-volatile data storage by recording magnetic information on [removed: a] rotating [removed: disk.][added: disks.]

Our multi-year product roadmap for high-capacity [removed: HDD,] [added: HDDs,] which [removed: combines] [added: include] ePMR, OptiNAND, UltraSMR and triple stage actuators to deliver a cutting-edge portfolio of drives, in commercial volumes, at a wide variety of capacity points, puts Western Digital in a strong position to capitalize on the opportunities presented by the large and growing storage markets.

We provide the Cloud end market with an array of high-capacity enterprise [removed: HDD, high-performance enterprise SSD] [added: HDDs] and platforms.

Our capacity enterprise [removed: hard disk drives provide high-capacity] [added: HDDs address growing] storage [removed: needs] [added: demands with high reliability, easy scalability,] and [added: lower time to value for our customers — all while delivering] a low total cost of ownership for [removed: the growing] cloud data center and smart video system markets.

Our [removed: HDD and SSD] [added: products] are designed for use in devices requiring high performance, reliability and capacity with various attributes such as low cost per gigabyte, quiet acoustics, [added: and] low power [removed: consumption and protection against shocks.][added: consumption.]

We serve the Consumer end market with a portfolio of HDD [removed: and SSD embedded into] external storage products and [removed: removable Flash, which include cards, universal serial bus (“USB”) flash drives and wireless drives,] [added: our vast presence around the world] through our retail and channel routes to market.

We believe we are well-positioned [added: in our competitive industry] with our leading product portfolio, [removed: premium consumer brand,] differentiated [removed: semiconductor] innovation [removed: engine] [added: engine, global manufacturing footprint,] and leadership in driving [added: areal density and] cost efficiency.

Our overall strategy focuses on leadership, innovation and [removed: execution to be] [added: execution, with a goal of furthering Western Digital as] an industry-leading and broad-based developer, manufacturer and provider of storage devices and solutions that support the infrastructure that has enabled [removed: the unabated] [added: a] proliferation of data.

Research and [removed: Development][added: Technology]

We [added: have broad research and development (“R&D”) capabilities and] devote substantial resources to the development of new products and the improvement of existing products.

We have approximately [removed: 13,000] [added: 4,500] active patents worldwide and have many patent applications in process.

The critical elements of our production [removed: of both HDD and Flash] are high volume and utilization, low-cost assembly and testing, strict adherence to quality metrics and maintaining close relationships with our strategic component suppliers to access best-in-class technology and manufacturing capacity.

HDD [removed: and Flash] manufacturing [removed: are each] [added: is a] complex [removed: processes] [added: process] involving the production and assembly of precision components with narrow tolerances and rigorous testing.

[removed: As a result,] we are more dependent upon our own development and execution efforts for these components and less reliant on recording head and magnetic media technologies developed by other manufacturers.

We depend on an external supply base for all remaining components and materials for use in our [removed: HDD] design, manufacturing and testing.

We believe the use of our in-house manufacturing, assembly and test facilities [removed: provides] [added: offers] the controls necessary to provide the demanding capabilities, performance and reliability our customers require.

Our vertically integrated, in-house assembly and test operations [removed: for our HDD products] are concentrated in Prachinburi and Bang Pa-In, Thailand; Penang, Johor Bahru, and Kuching, Malaysia; Laguna, Philippines; Shenzhen, China; and San Jose and Fremont, CA, USA.

We sell our products to [added: cloud service providers,] computer manufacturers and OEMs, [removed: cloud service providers,] resellers, distributors and retailers throughout the world.

Our international sales, which include sales to foreign subsidiaries of U.S. companies but do not include sales to U.S. subsidiaries of foreign companies, represented [removed: 72%, 69%] [added: 55%, 58%] and [removed: 71%] [added: 57%] of our net revenue for [removed: 2024, 2023] [added: 2025, 2024] and [removed: 2022,] [added: 2023,] respectively.

[removed: Sales to international customers] [added: Our sales] are subject to certain [removed: risks not normally encountered in domestic operations,] [added: risks,] including exposure to tariffs and various trade regulations.

For [removed: each of 2024, 2023] [added: 2024] and [removed: 2022,] [added: 2023,] no single customer accounted for 10% or more of our net revenue.

[removed: Seasonality] [added: Our business] is also impacted by cyclicality in the [removed: industry and] [added: industry, as well as] macroeconomic [removed: conditions.][added: factors.]

For additional information regarding our service and warranty policy, see Part II, Item 8, Note 1, *Organization and Basis of Presentation,* and Note [removed: 4,] [added: 5,] *Supplemental Financial Statement Data,* of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K.

At the end of [removed: 2024,] [added: 2025,] we employed approximately [removed: 51,000] [added: 40,000] people worldwide.

Our diverse team spans [removed: 36] [added: 24] countries with approximately [removed: 85%] [added: 88%] of our employees in Asia Pacific, [removed: 13%] [added: approximately 11%] in the Americas and [removed: 2%] [added: less than 1%] in Europe, the Middle East and Africa.

We continue to foster [removed: early] [added: the next generation of] talent through our intern and new college graduate recruitment programs, and [removed: in 2024,] we converted [removed: nearly half] [added: about 40%] of our [added: eligible] global intern population to [removed: employees.][added: employees in 2025.]

HDDs are critical components in the worldwide data infrastructure market, powering the digital economy.

HDDs provide reliable, cost-effective, high-capacity storage needs for a wide range of applications, ranging from cloud data centers, enterprise storage systems, edge computing, and video surveillance to client and consumer devices.

On February 21, 2025 (the “Separation Date”), we completed the separation of our HDD and Flash business units (the “Separation”) to create two independent public companies, with Western Digital focusing on our existing HDD business and Sandisk Corporation (“Sandisk”), formerly a wholly-owned subsidiary of the Company, holding the Flash business.

As global data creation continues to accelerate, particularly in the age of AI, and as the need to store and retain data also grows, we believe HDDs will continue to remain the preferred technology for storing large volumes of data as the most economical solution to the large cloud data centers for their mass storage needs.

We believe Western Digital is well positioned as a leading supplier in the industry given the depth of our industry knowledge and the breadth of our product portfolio.

*Cloud*.

*Client*.

*Consumer*.

While this growth has led to the creation of several form factors for data storage and an increasing use of a tiered architecture approach, HDDs occupy a unique place in the market by providing an economical means to create, store and utilize an increasing amount of data in the age of AI.

We believe HDDs provide a sustainable total cost of ownership (TCO) advantage to our cloud customers to meet their storage needs.

We have a wide range of intellectual property (“IP”) assets, including patent portfolios containing approximately 4,500 active patents, covering groundbreaking data storage technologies, magnetic recording and other technology building blocks.

Nevertheless, we face strong competition from several manufacturers of storage products and storage systems and solutions, whether directly or indirectly.

Our competitors include HDD competitors such as Seagate Technology Holdings plc, and Toshiba Electronic Devices & Storage Corporation along with NAND flash suppliers that provide and enable alternative storage technologies, as well as storage systems and solutions providers.

Our vision is to unleash the power and value of data.

Our mission is to be the market leader in data storage by delivering storage solutions for now and the future.

By understanding our customers’ needs, together we can help them unlock the value and power of data that we are starting to see come to the fore, especially in this age of AI.

Our strategy reflects the following foundational elements: (1) Enhanced customer focus for driving greater customer advocacy and deeper customer engagement, (2) Product and technology leadership for realizing the best total cost of ownership through disciplined product management, (3) Rigorous financial discipline by having a clear capital allocation strategy, ambitious financial targets and prudent capital investment, (4) Operational excellence for driving best-in-class cost to achieve industry-leading margin profiles with strong execution, (5) Innovation and growth for creating new products and applications and identifying new market opportunities, and (6) High performance teams with the skill sets to meet go-forward business needs.

As a result,

For 2025, three customers accounted for 17%, 12%, and 10%, respectively, of our net revenue.

Cyclicality and Seasonality

Our business is subject to variability of sales because it is largely dependent on the buying patterns of our large Cloud customers, driven by their needs for deploying our technology in their data center buildouts, as well as on their ability to procure other products that go into such buildouts.

Our people strategy supports our vision of unleashing the power and value of data and our mission to be the market leader in data storage, delivering solutions for now and the future.

We invest in developing our people to lead us into the future.

Our performance framework includes setting goals to establish clear expectations and receiving feedback and coaching to achieve them.

We make it a priority to recruit exceptional talent across the organization.

We believe employee engagement is key to performance and retention and that by listening to our employees we can better understand how we enable them to do their best work.

We use a combination of our employee survey and listening sessions at all levels to understand what we are doing well and identify opportunities to strengthen employee engagement in support of our business strategy.

We strive to cultivate an inclusive environment where every individual feels valued, respected, and appreciated, thereby enabling them to contribute effectively to the organization and excel in their roles.

Our initiatives celebrate the diversity of our workforce and ensure that all voices are heard.

Our Employee Resource Groups are employee-led and foster connections based on a shared identity or background and are open to all employees who want to join.

We continued our commitment to conducting business in an ethical way around the world.

At Western Digital, sustainability is about innovating with technology to positively impact our future.

We believe that sustainability can create value for everyone in our value chain and serves as a competitive differentiator, while minimizing our environmental footprint, influencing our ecosystem, empowering and connecting our stakeholders and embedding sustainability in our decision-making processes.

- We work to minimize our impact on the environment by reducing emissions, water withdrawal and waste to landfills, and by evaluating and enhancing our climate resiliency.

- We actively collaborate with customers, suppliers, industry associations, governments, academics, standards organizations and industry partners to generate value, reduce emissions across the ecosystem, and increase circularity to reduce raw materials extraction.

- We seek to foster a workplace of inclusion by hiring and developing team members with different experiences and creating opportunities for connections across the company through our Employee Resource Groups.

- We are guided by our global pillars centered on hunger relief, environmental quality and STEM (science, technology, engineering and math) education and activate employees locally to have an impact on their community.

- We set new environmental goals post-Separation to expand our focus to include carbon-free energy alternatives, add an upstream direct emissions reduction goal and goals for increasing recycled content in products and packaging for our enterprise HDD portfolio.

With a differentiated innovation engine driving advancements in storage and semiconductor technologies, our broad and ever-expanding portfolio delivers powerful hard disk drives (“HDD”) and flash-based products (“Flash”) storage solutions for everyone from students, gamers and home offices, to the largest enterprises and public clouds to capture, preserve, access and transform an ever-increasing diversity of data.

Cloud is comprised primarily of products for public or private cloud environments and end customers.

The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast points of presence around the world.

On October 30, 2023, we announced that our Board of Directors had completed its strategic review of our business and, after evaluating a comprehensive range of alternatives, authorized us to pursue a plan to separate our HDD and Flash business units to create two independent, public companies.

The completion of the planned separation is subject to certain conditions, including final approval by our Board of Directors.

Significant effort is underway and extensive progress has been made with respect to the separation as we continue to drive towards completing the work required to separate the businesses by the end of calendar year 2024.

We have valuable patent portfolios containing approximately 13,000 active patents, covering groundbreaking memory technologies and beyond.

We help OEMs address storage opportunities and solutions to capture and transform data in a myriad of devices and edge technologies.

This growth has led to the creation of new form factors for data storage.

The storage industry is increasingly utilizing tiered architectures with solid state drives (“SSD”), HDD and other non-volatile memory-based storage to address an expanding set of uses and applications.

We believe our expertise and innovation across both HDD and Flash technologies enable us to bring powerful solutions to a broad range of applications.

We continuously monitor the full array of storage technologies, including reviewing these technologies with our customers, to ensure we are appropriately resourced to meet our customers’ storage needs.

Technology

*Flash Technologies*.

Flash-based products provide non-volatile data storage based on flash technology.

We develop and manufacture solid state storage products for a variety of applications including enterprise or cloud, client, automotive, mobile devices and removable memory devices.

Over time, we have successfully developed and commercialized successive generations of multi-dimensional flash technology with increased numbers of storage bits per cell in an increasingly smaller form factor, further driving cost reductions.

We devote significant R&D resources to the development of highly reliable, high-performance, cost-effective flash-based technology and are continually pursuing developments in next-generation flash-based technology capacities.

We are leveraging our expertise, resources and strategic investments in non-volatile memories to explore a wide spectrum of persistent memory and storage class memory technologies.

We have also initiated, defined and developed standards to meet new market needs and to promote wide acceptance of flash storage standards through interoperability and ease of use.

Our Data Solutions

Our broad portfolio of technology and products addresses multiple end markets of “Cloud,” “Client” and “Consumer” and are comprised of the Western Digital®, SanDisk® and WD® brands.

Our high-performance enterprise class SSD include high-performance flash-based SSD and software solutions that are optimized for performance applications providing a range of capacity and performance levels primarily for use in enterprise servers and supporting high-volume online transactions, AI-related workloads, data analysis and other enterprise applications.

Through the Client end market, we provide numerous data solutions that we incorporate into our client’s devices, which consist of HDD and SSD desktop and notebook PCs, gaming consoles and set top boxes, as well as flash-based embedded storage products for mobile phones, tablets, notebook PCs and other portable and wearable devices, automotive applications, Internet of Things and industrial and connected home applications.

Our external HDD storage products in both mobile and desktop form factors provide affordable, high quality, reliable storage for backup and capacity expansion that are designed to keep digital content secure.

We offer client portable SSD with a range of capacities and performance characteristics to address a broad spectrum of the client storage market.

Our removable cards are designed primarily for use in consumer devices, such as mobile phones, tablets, imaging systems, cameras and smart video systems.

Our USB flash drives are used in the computing and consumer markets and are designed for high-performance and reliability.

Our wireless drive products allow in-field backup of created content, as well as wireless streaming of high-definition movies, photos, music and documents to tablets, smartphones and PCs.

Our industry is highly competitive.

Nevertheless, we face strong competition from other manufacturers of HDD and Flash in the Cloud, Client and Consumer end markets.

In HDD, we compete with Seagate Technology Holdings plc and Toshiba Electronic Devices & Storage Corporation.

In Flash, we compete with vertically integrated suppliers such as Kioxia, Micron Technology, Inc., Samsung Electronics Co., Ltd., SK Hynix, Inc., Yangtze Memory Technologies Co., Ltd. and numerous smaller companies that develop and manufacture flash-based products.

Our strategy reflects the following foundational elements that we strive to meet:

*•Drive Leadership in HDD*

▪Provide reliable capacity growth and improved total cost of ownership

▪Enhance customers’ ability to generate value from data

▪Develop new technologies across the storage landscape

*•Drive Differentiated Leadership in Flash*

▪Capitalize on market transition to solid state drives

See Part II, Item 8, Note 17, *Legal Proceedings* [removed: and Note 13, *Income Tax Expense*] of the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for disclosures regarding certain legal [removed: proceedings and the status of statutory notices of deficiency issued by the IRS with regards to tax years 2008 through 2015, respectively,] [added: proceedings,] which are incorporated by reference herein.

For the fiscal year ended June [removed: 28, 2024][added: 27, 2025]

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b) [removed: ý][added: ¨]

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on December [removed: 29, 2023,] [added: 27, 2024,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $12.90] [added: $12.24] billion, based on the closing sale price as reported on the Nasdaq Global Select Market.

There were [removed: 343,451,583] [added: 346,922,126] shares of common stock, par value $0.01 per share, outstanding as of the close of business on [removed: August 7, 2024.][added: July 23, 2025.]

Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the “Proxy Statement”) for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders, which [removed: will be filed] [added: we intend to file] with the Securities and Exchange Commission within 120 days after the end of the [removed: 2024] [added: 2025] fiscal year.

| Item 1. | | | Business | | | [removed: [4](#ib2997730a43a454a9701e58b314f8f86_19)] [added: [4](#i00b8f243f6ad4d2d8536d6bfd3451a64_19)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [12](#ib2997730a43a454a9701e58b314f8f86_22)] [added: [10](#i00b8f243f6ad4d2d8536d6bfd3451a64_22)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [27](#ib2997730a43a454a9701e58b314f8f86_25)] [added: [24](#i00b8f243f6ad4d2d8536d6bfd3451a64_25)] | | |

| Item 1C. | | | Cybersecurity | | | [removed: [27](#ib2997730a43a454a9701e58b314f8f86_1099511630646)] [added: [24](#i00b8f243f6ad4d2d8536d6bfd3451a64_28)] | | |

| Item 2. | | | Properties | | | [removed: [29](#ib2997730a43a454a9701e58b314f8f86_28)] [added: [26](#i00b8f243f6ad4d2d8536d6bfd3451a64_31)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [31](#ib2997730a43a454a9701e58b314f8f86_34)] [added: [27](#i00b8f243f6ad4d2d8536d6bfd3451a64_37)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [31](#ib2997730a43a454a9701e58b314f8f86_34)] [added: [27](#i00b8f243f6ad4d2d8536d6bfd3451a64_37)] | | |

| Item 5. | | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [32](#ib2997730a43a454a9701e58b314f8f86_43)] [added: [28](#i00b8f243f6ad4d2d8536d6bfd3451a64_46)] | | |

| Item 6. | | | \[Reserved\] | | | [removed: [33](#ib2997730a43a454a9701e58b314f8f86_49)] [added: [29](#i00b8f243f6ad4d2d8536d6bfd3451a64_52)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [34](#ib2997730a43a454a9701e58b314f8f86_52)] [added: [30](#i00b8f243f6ad4d2d8536d6bfd3451a64_55)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [50](#ib2997730a43a454a9701e58b314f8f86_88)] [added: [47](#i00b8f243f6ad4d2d8536d6bfd3451a64_91)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [51](#ib2997730a43a454a9701e58b314f8f86_94)] [added: [48](#i00b8f243f6ad4d2d8536d6bfd3451a64_97)] | | |

| Item 9. | | | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | | | [removed: [110](#ib2997730a43a454a9701e58b314f8f86_211)] [added: [104](#i00b8f243f6ad4d2d8536d6bfd3451a64_229)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [110](#ib2997730a43a454a9701e58b314f8f86_214)] [added: [104](#i00b8f243f6ad4d2d8536d6bfd3451a64_232)] | | |

| Item 9B. | | | Other Information | | | [removed: [111](#ib2997730a43a454a9701e58b314f8f86_217)] [added: [105](#i00b8f243f6ad4d2d8536d6bfd3451a64_235)] | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | [removed: [111](#ib2997730a43a454a9701e58b314f8f86_220)] [added: [105](#i00b8f243f6ad4d2d8536d6bfd3451a64_241)] | | |

| Item 10. | | | Directors, Executive Officers and Corporate Governance | | | [removed: [112](#ib2997730a43a454a9701e58b314f8f86_226)] [added: [106](#i00b8f243f6ad4d2d8536d6bfd3451a64_247)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [112](#ib2997730a43a454a9701e58b314f8f86_229)] [added: [106](#i00b8f243f6ad4d2d8536d6bfd3451a64_250)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [112](#ib2997730a43a454a9701e58b314f8f86_232)] [added: [106](#i00b8f243f6ad4d2d8536d6bfd3451a64_253)] | | |

| Item 13. | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [112](#ib2997730a43a454a9701e58b314f8f86_235)] [added: [106](#i00b8f243f6ad4d2d8536d6bfd3451a64_256)] | | |

| Item 14. | | | Principal Accountant Fees and Services | | | [removed: [112](#ib2997730a43a454a9701e58b314f8f86_238)] [added: [106](#i00b8f243f6ad4d2d8536d6bfd3451a64_259)] | | |

| Item 15. | | | Exhibits and Financial Statement Schedules | | | [removed: [113](#ib2997730a43a454a9701e58b314f8f86_244)] [added: [107](#i00b8f243f6ad4d2d8536d6bfd3451a64_265)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [117](#ib2997730a43a454a9701e58b314f8f86_250)] [added: [111](#i00b8f243f6ad4d2d8536d6bfd3451a64_271)] | | |

Western Digital, the Western Digital [removed: logo, SanDisk] [added: logo] and WD are registered trademarks or trademarks of Western Digital or its affiliates in the U.S. and/or other countries.


Examples of forward-looking statements include, but are not limited to, statements concerning: the impact of the global macroeconomic environment, including tariffs; expectations regarding demand trends, market opportunities and our market position, including related to artificial intelligence (“AI”); our product plans and business strategies; consumer trends and market conditions; expectations regarding our future financial performance; expectations regarding our product development and technology plans; expectations regarding capital expenditure plans and investments; expectations regarding our tax resolutions, effective tax rate and our unrecognized tax benefits; expectations regarding the merits of our position and our plans with respect to certain litigation matters; our beliefs regarding our capital allocation plans, including our quarterly dividend program and our share repurchase program, and the sufficiency of our available liquidity to meet our working capital, debt and capital expenditure needs; and our expectations regarding the completed separation of our hard disk drive (“HDD”) and Flash business units, including the disposition of our retained stake in Sandisk Corporation.*


Examples of forward-looking statements include, but are not limited to, statements concerning:*

*•our expectations regarding our plan to separate our HDD and Flash business units;*

*•our product plans and business strategies;*

*•consumer trends and market conditions;*

*•expectations regarding demand trends, market opportunities and our market position;*

*•expectations regarding our future financial performance;*

*•the impact of the global macroeconomic environment;*

*•expectations related to our agreed sale of a portion of our equity interest in SanDisk Semiconductor (Shanghai) Co. Ltd.;*

*•expectations related to our joint ventures and partnerships including relating to our Flash Ventures joint venture with Kioxia Corporation (“Kioxia”);*

*•expectations regarding our product development and technology plans;*

*•expectations regarding capital expenditure plans and investments;*

*•expectations regarding our tax resolutions, effective tax rate and our unrecognized tax benefits;*

*•expectations regarding the merits of our position and our plans with respect to certain litigation matters; and*

*•our beliefs regarding our capital allocation plans and the sufficiency of our available liquidity to meet our working capital, debt and capital expenditure needs.*

Our enterprise risk management (“ERM”) process is designed to facilitate the identification, assessment, management, reporting and monitoring of material risks our company may face over the short-term and long-term and [removed: assure] [added: promote] regular communication with our Board of Directors and its committees regarding these risks.

Through our ERM process, we have determined that the compromise, damage [removed: or] [added: and] interruption of our technology infrastructure, information systems or products by cybersecurity incidents [removed: is a] [added: are] key [removed: risk] [added: risks] to our company that may have a material negative impact on our business.

[removed: Western Digital’s] [added: Our] Information Security organization addresses cybersecurity risks with a broad spectrum of technologies, controls, and processes that focus on mitigating these risks.

Additionally, we have established a Cyber Incident Response Plan that follows the structure of the Incident Handling Guide published by the U.S. National Institute of Standards and Technology (SP 800-61r2) and that serves as an operational guide for handling cybersecurity [removed: incidents at Western Digital.][added: incidents.]

As part of our ongoing information security program, [removed: Western Digital utilizes] [added: we utilize] periodic independent third-party experts to conduct assessments of our program’s effectiveness.

As part of our business operations, [removed: Western Digital engages] [added: we engage] with a number of third parties, including but not limited to, online software service providers, vendors, consultants, and partners.

Each of these [removed: third-parties] [added: third parties] must be cleared through a formal cybersecurity risk assessment process before being allowed to integrate with [removed: Western Digital’s] [added: our] information systems, access confidential data, or provide electronic services to members of our workforce.

[removed: Western Digital has] [added: We have] in the past experienced cybersecurity incidents of varying degrees involving our technology infrastructure and information systems, including incidents in which unauthorized parties have obtained access to our information systems and networks.

[removed: Western Digital has] [added: We have] implemented a governance framework related to cybersecurity that includes operational risk-mitigation practices and Board-level cybersecurity risk oversight.

The Impact Assessment Committee receives updates and communications from the Security Operations Center on a fixed cadence determined by incident severity and follows our pre-established escalation framework [added: provided by our Security Incident Response Plan] to communicate with and include executive leadership, outside counsel and [removed: the] [added: our] Board of Directors, as appropriate.

The Impact Assessment Committee works with [removed: the Company’s] [added: our] internal and external legal counsel to determine and facilitate appropriate communications with [removed: the] [added: our] Board of Directors.

Our Board of Directors has delegated to [removed: the] [added: our] Audit Committee the responsibility to oversee risks related to cybersecurity threats, and our Audit Committee Charter requires [removed: the] [added: our] Audit Committee to review and discuss with management the Company’s policies with respect to risk assessment and enterprise risk management and to review the risk exposure of the Company related to the Committee’s areas of responsibility, including with respect to cybersecurity.

In carrying out this role, [removed: the] [added: our] Audit Committee meets with our Chief Information Security Officer regularly and receives at least quarterly reports on cybersecurity matters.

Also at least annually, our Chief Information Security Officer reports to [removed: the] [added: our] full Board of Directors on cybersecurity matters related to or impacting our company and our business.

Our leased facilities have contracts expiring at various times through [removed: 2039.][added: 2034.]

Our principal manufacturing, R&D, marketing and administrative facilities as of June [removed: 28, 2024] [added: 27, 2025] were as follows:

| Fremont | | | | | | Leased | | | | | | 295,000 | | | | | | [removed: HDD manufacturing of head wafers] [added: Manufacturing] and R&D | | |

| Irvine | | | | | | Leased | | | | | | [removed: 408,000] [added: 258,000] | | | | | | [removed: HDD] R&D, administrative, marketing and sales | | |

| San Jose | | | | | | Owned | | | | | | [removed: 2,205,000] [added: 1,957,000] | | | | | | [removed: Manufacturing of head wafers, head, media and product development, R&D for Flash and HDD,] [added: Manufacturing, R&D,] administrative, marketing and sales | | |

| Colorado Springs | | | | | | Leased | | | | | | 54,000 | | | | | | [removed: HDD] R&D | | |

| Shenzhen | | | | | | Owned and Leased | | | | | | 614,000 | | | | | | [removed: HDD manufacturing of media and sales] [added: Manufacturing] | | |

| Johor | | | | | | Owned | | | | | | 277,000 | | | | | | [removed: HDD manufacturing of substrates] [added: Manufacturing] | | |

| Kuala Lumpur | | | | | | Owned | | | | | | 145,000 | | | | | | [removed: HDD] R&D and administrative | | |

| Kuching | | | | | | Owned | | | | | | 529,000 | | | | | | [removed: HDD manufacturing] [added: Manufacturing] and [removed: development of substrates] [added: R&D] | | |

| Laguna | | | | | | Owned | | | | | | 632,000 | | | | | | [removed: HDD manufacturing of HGAs] [added: Manufacturing] and [removed: slider fabrication] [added: administrative] | | |

| Bang Pa-In | | | | | | Owned and Leased | | | | | | 1,595,000 | | | | | | [removed: HDD slider fabrication, manufacturing of HDDs and HGAs,] [added: Manufacturing] and R&D | | |

| Prachinburi | | | | | | Owned | | | | | | 1,568,000 | | | | | | [removed: HDD manufacturing] [added: Manufacturing] | | |

We also lease office space in various other locations worldwide primarily for R&D, [added: marketing and] sales, [removed: operations, manufacturing, administration] and [removed: technical support.][added: administration.]

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Rochester | | | | | | Leased | | | | | | 111,000 | | | | | | R&D | | |

| | | | | | | | | | | | | | | | | | | | | |

| Fujisawa | | | | | | Owned | | | | | | 638,000 | | | | | | R&D | | |

| Penang | | | | | | Owned | | | | | | 1,192,000 | | | | | | Manufacturing | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Milpitas | | | | | | Leased | | | | | | 578,000 | | | | | | Flash R&D, marketing and sales, and administrative | | |

| Longmont | | | | | | Leased | | | | | | 62,000 | | | | | | Flash R&D | | |

| Rochester | | | | | | Leased | | | | | | 156,000 | | | | | | Flash and HDD product development | | |

| Shanghai | | | | | | Owned | | | | | | 917,000 | | | | | | Flash assembly and test of SSD | | |

| Fujisawa | | | | | | Owned | | | | | | 661,000 | | | | | | HDD product development | | |

| Penang | | | | | | Owned | | | | | | 2,420,000 | | | | | | Assembly and test of SSD, manufacturing of media, and R&D for Flash and HDD | | |

| India | | | | | | | | | | | | | | | | | | | | |

| Bangalore | | | | | | Owned and Leased | | | | | | 1,317,000 | | | | | | Flash R&D and administrative | | |

| Middle East | | | | | | | | | | | | | | | | | | | | |

| Israel | | | | | | | | | | | | | | | | | | | | |

| Kfar Saba | | | | | | Owned | | | | | | 167,000 | | | | | | Flash R&D | | |

| Tefen | | | | | | Owned | | | | | | 72,000 | | | | | | Flash R&D | | |

During the year ended June 28, 2024, we completed a sale and leaseback of our facility in Milpitas, California.

We continuously update our facilities from time to time to meet technological and market requirements.

Substantially all of our flash-based memory wafers are manufactured by Kioxia in purpose-built, wafer fabrication facilities located in Yokkaichi and Kitakami, Japan.

The approximate number of holders of record of our common stock as of [removed: August 7, 2024] [added: July 23, 2025] was [removed: 802.][added: 720.]

The following graph compares the cumulative total stockholder return of our common stock with the cumulative total return of the S&P 500 Index and the Dow Jones U.S. Technology Hardware & Equipment Index for the five years ended June [removed: 28, 2024.][added: 27, 2025.]

The graph assumes that $100 was invested in our common stock at the close of market on [removed: June 28, 2019] [added: July 3, 2020] and that all dividends were reinvested.

Stockholder returns over the indicated period should not be considered indicative of future [removed: stockholder] [added: shareholder] returns.

(Assumes $100 investment at market close on [removed: June 28, 2019)][added: July 3, 2020)]

[removed: ][added: ]

| | | | [removed: June 28, 2019 | | | | | |] July 3, 2020 | | | | | | July 2, 2021 | | | | | | July 1, 2022 | | | | | | June 30, 2023 | | | | | | June 28, 2024 | | | [added: | | | June 27, 2025 | | |]

| Dow Jones U.S. Technology Hardware & Equipment Index | | | $ | 100.00 | | | | | $ | [removed: 145.46] [added: 156.60] | | | | | $ | [removed: 224.80] [added: 137.50] | | | | | $ | [removed: 200.70] [added: 207.56] | | | | | $ | [removed: 300.76] [added: 315.78] | | | | | $ | [removed: 457.57] [added: 352.49] | |

The stock performance graph shall not be deemed soliciting material or to be filed with the [removed: SEC] [added: U.S. Securities and Exchange Commission (the “SEC”)] or subject to Regulation 14A or 14C under the Securities Exchange Act of [removed: 1934] [added: 1934, as amended (the “Exchange Act”),] or to the liabilities of Section 18 of the [removed: Securities] Exchange [removed: Act of 1934,] [added: Act,] nor shall it be incorporated by reference into any past or future filing under the Securities Act of [removed: 1933] [added: 1933, as amended (the “Securities Act”)] or the [removed: Securities] Exchange [removed: Act of 1934,] [added: Act,] except to the extent we specifically request that it be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act [removed: of 1933] or the [removed: Securities] Exchange [removed: Act of 1934.][added: Act.]

*Cash Dividend Program*

On April 29, 2025, our Board of Directors authorized the adoption of a quarterly cash dividend program.

Under the cash dividend program, holders of our common stock will receive dividends when and as declared by our Board of Directors.

During the year ended June 27, 2025, we paid cash dividends of $0.10 per share of our outstanding common stock, totaling $36 million, including payment to holders of our Series A Preferred Stock in accordance with their participation rights.

Subsequent to year-end, on July 29, 2025, our Board of Directors declared a cash dividend of $0.10 per share of our common stock, which will be paid on September 18, 2025 to our shareholders of record as of the close of business on September 4, 2025.

We may modify, suspend, or cancel our cash dividend program in any manner and at any time.

The amount of future dividends under our cash dividend program, and the declaration and payment thereof, will be based upon all relevant factors, including our financial position, results of operations, cash flows, capital requirements and restrictions under our Loan Agreement and other financing agreements, and shall be in compliance with applicable law.

Issuer Purchases of Equity Securities

The following table provides information about repurchases by us of shares of our common stock during the quarter ended June 27, 2025:

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (in millions, except average price paid per share) | | | Total Number of Shares Purchased | | | | | | Average Price Paid per Share(1) | | | | | | Total Number of Shares Purchased As Part of Publicly Announced Program(2) | | | | | | Maximum Value of Shares that May Yet be Purchased Under the Program(2) | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Mar. 29, 2025 - Apr. 25, 2025 | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 2,000 | |

| Apr. 26, 2025 - May 23, 2025 | | | 0.5 | | | | | | 49.74 | | | | | | 0.5 | | | | | | $ | 1,975 | |

| May 24, 2025 - Jun. 27, 2025 | | | 2.3 | | | | | | 54.92 | | | | | | 2.3 | | | | | | $ | 1,851 | |

| Total for the quarter ended Jun. 27, 2025 | | | 2.8 | | | | | | $ | 53.97 | | | | | 2.8 | | | | | | | | |

(1) Includes commissions.

(2) On May 9, 2025, our Board of Directors authorized a share repurchase program for the repurchase of up to $2.0 billion of our common stock.

There is no expiration date for the share repurchase program.

Repurchases under the share repurchase program may be made in the open market or in privately negotiated transactions and may be made under a Rule 10b5-1 plan.

We expect share repurchases to be funded principally by operating cash flows.

The amount and timing of share repurchases will depend on market conditions and other corporate considerations.

The company may suspend or discontinue the share repurchase program at any time.

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 165.43 | | | | | $ | 102.31 | | | | | $ | 88.60 | | | | | $ | 178.53 | | | | | $ | 197.73 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 141.23 | | | | | $ | 125.94 | | | | | $ | 149.04 | | | | | $ | 185.64 | | | | | $ | 212.67 | |

In April 2020, we suspended our quarterly cash dividend.

For more information about our dividends, see Part II, Item 7, *Management’s Discussion and Analysis of Financial Condition and Results of Operations – Short- and Long-term Liquidity.*

| Western Digital Corporation | | | $ | 100.00 | | | | | $ | 89.25 | | | | | $ | 147.66 | | | | | $ | 91.31 | | | | | $ | 79.77 | | | | | $ | 159.35 | |

| S&P 500 Index | | | $ | 100.00 | | | | | $ | 107.51 | | | | | $ | 151.36 | | | | | $ | 135.29 | | | | | $ | 161.80 | | | | | $ | 201.53 | |

| Report of Independent Registered Public Accounting Firm (Auditor Firm ID: 185) | | | [removed: [52](#ib2997730a43a454a9701e58b314f8f86_97)] [added: [49](#i00b8f243f6ad4d2d8536d6bfd3451a64_100)] | | |

| Consolidated Balance Sheets — As of June [removed: 28, 2024] [added: 27, 2025] and June [removed: 30, 2023] [added: 28, 2024] | | | [removed: [54](#ib2997730a43a454a9701e58b314f8f86_100)] [added: [52](#i00b8f243f6ad4d2d8536d6bfd3451a64_103)] | | |

| Consolidated Statements of Operations — Three Years Ended June [removed: 28, 2024] [added: 27, 2025] | | | [removed: [55](#ib2997730a43a454a9701e58b314f8f86_103)] [added: [53](#i00b8f243f6ad4d2d8536d6bfd3451a64_106)] | | |

| Consolidated Statements of Comprehensive [removed: Loss] [added: Income (Loss)] — Three Years Ended June [removed: 28, 2024] [added: 27, 2025] | | | [removed: [56](#ib2997730a43a454a9701e58b314f8f86_106)] [added: [54](#i00b8f243f6ad4d2d8536d6bfd3451a64_109)] | | |

| Consolidated Statements of Cash Flows — Three Years Ended June [removed: 28, 2024] [added: 27, 2025] | | | [removed: [57](#ib2997730a43a454a9701e58b314f8f86_109)] [added: [55](#i00b8f243f6ad4d2d8536d6bfd3451a64_112)] | | |

| Consolidated Statements of Convertible Preferred Stock and [removed: Shareholders'] [added: Shareholders’] Equity — Three Years Ended June [removed: 28, 2024] [added: 27, 2025] | | | [removed: [58](#ib2997730a43a454a9701e58b314f8f86_112)] [added: [56](#i00b8f243f6ad4d2d8536d6bfd3451a64_115)] | | |

| Notes to Consolidated Financial Statements | | | [removed: [59](#ib2997730a43a454a9701e58b314f8f86_115)] [added: [57](#i00b8f243f6ad4d2d8536d6bfd3451a64_118)] | | |

To the Shareholders and [added: the] Board of Directors

We have audited the accompanying consolidated balance sheets of Western Digital Corporation and subsidiaries (the Company) as of June [removed: 28, 2024] [added: 27, 2025] and June [removed: 30, 2023,] [added: 28, 2024,] the related consolidated statements of operations, comprehensive income (loss), cash flows, [added: and] convertible preferred stock and shareholders’ equity for each of the [added: fiscal] years in the three-year period ended June [removed: 28, 2024,] [added: 27, 2025,] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of June [removed: 28, 2024,] [added: 27, 2025,] based on criteria established in [removed: Internal] [added: *Internal] Control – Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June [removed: 28, 2024] [added: 27, 2025] and June [removed: 30, 2023,] [added: 28, 2024,] and the results of its operations and its cash flows for each of the [added: fiscal] years in the three-year period ended June [removed: 28, 2024,] [added: 27, 2025,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June [removed: 28, 2024] [added: 27, 2025] based on criteria established in [removed: Internal] [added: *Internal] Control – Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying [removed: Item 9A *Controls and Procedures – Management's] [added: Management’s] Report on Internal Control over Financial [removed: Reporting*.][added: Reporting.]

*Critical Audit [removed: Matter*][added: Matters*]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of [removed: a] critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

As discussed in Note 1 to the consolidated financial statements, the Company provides [removed: resellers] [added: distributors and retailers (collectively referred to as resellers)] with [added: limited] price protection and [added: resellers and original equipment manufacturers (OEMs) with] other sales incentive programs.

We identified the [removed: assessment] [added: evaluation] of [added: the sufficiency of audit evidence over certain] variable consideration [added: reductions to revenue] for sales to resellers [added: and OEMs] as a critical audit matter.

[added: -] We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process for determining [removed: the] variable [removed: consideration, including certain controls related to historical pricing information and the level of channel inventory.][added: consideration.]

| | | | [added: | | | | | | | | | | | |] June [added: 27, 2025 | | | | | | June] 28, 2024 | | | | | | June 30, 2023 | | |

| Cash and cash [removed: equivalents |] [added: equivalents, beginning of year] | | [removed: $] | 1,879 | | | | | [removed: $] | 2,023 | | [added: | | | | 2,327 | | |]

| Accounts receivable, net | | | [removed: 2,166] | | | [removed: | | | 1,598] [added: 935] | | |

| Other current assets | | | [removed: 673] | | | [removed: | | | 567] [added: 313] | | |

| Total current assets | | | [removed: 8,060] [added: 5,856] | | | | | | [removed: 7,886] [added: 8,060] | | |

| Property, plant and equipment, net | | | [removed: 3,167] | | | [removed: | | | 3,620] [added: $] | [added: 808] | |

| Notes receivable and investments in Flash Ventures | | | [removed: 991] | | | [removed: | | | 1,410] [added: 991] | | |

| Other [removed: intangible assets,] [added: expense,] net | | | [removed: 78] [added: 2] | | | | | | [removed: 80] [added: 14] | | | [added: | | | 20 | | |]

| Other non-current assets | | | [removed: 1,860] | | | [removed: | | | 1,513] [added: 1,101] | | |

| Total assets | | | $ | [removed: 24,188] [added: 14,002] | | | | | $ | [removed: 24,546] [added: 24,188] | |

| Accounts payable | | | [removed: $] | [removed: 1,411] | | [removed: | | |] $ | [removed: 1,293] [added: 357] | |

| Accounts payable to related parties | | | [removed: 313] | | | [removed: | | | 292] [added: 313] | | |

| Accrued expenses | | | [removed: 1,480] | | | [removed: | | | 1,288] [added: 427] | | |

| Income taxes payable | | | [removed: 525] | | | [removed: | | | 999] [added: 54] | | |

| Accrued compensation | | | [removed: 608] | | | [removed: | | | 349] [added: 173] | | |

| Current portion of long-term debt | | | [removed: 1,750] [added: 2,226] | | | | | | [removed: 1,213] [added: 1,750] | | |

| Total current liabilities | | | [removed: 6,087] [added: 5,418] | | | | | | [removed: 5,434] [added: 6,087] | | |

| Long-term debt | | | [removed: 5,684] [added: 2,485] | | | | | | [removed: 5,857] [added: 5,684] | | |

| Total liabilities | | | [removed: 13,141] [added: 8,462] | | | | | | [removed: 12,706] [added: 13,141] | | |

| Commitments and contingencies (Notes [removed: 9,] 10, 13 and 17) | | | | | | | | | | | |

| Convertible preferred stock, $0.01 par value; authorized — 5 shares; issued and outstanding — 0.2 shares [removed: in 2024] [added: as of both June 27, 2025] and [removed: 0.9 shares in 2023;] [added: June 28, 2024;] aggregate liquidation preference of [removed: $257] [added: $265] and [removed: $924] [added: $257] as of June [removed: 28, 2024] [added: 27, 2025] and June [removed: 30, 2023,] [added: 28, 2024,] respectively | | | 229 | | | | | | [removed: 876] [added: 229] | | |

*Evaluation of sufficiency of audit evidence over certain variable consideration reductions to revenue*

The Company records the estimated variable consideration related to these items as a reduction to revenue at the time of revenue recognition.

This matter required a high degree of auditor effort in performing procedures to assess the reasonableness of certain variable consideration and associated customer-related accruals as such reductions to revenue involve a number of complex integrated information technology (IT) systems.

Therefore, our audit procedures required the involvement of IT professionals with specialized skills and knowledge and auditor judgment was required to determine the nature and extent of audit evidence obtained and to evaluate the results of the procedures.

- We involved IT professionals with specialized skills and knowledge, who assisted in the determination and testing of certain IT general and application controls that are used by the Company to determine variable consideration.

- We assessed certain of the recorded variable consideration by selecting a sample of transactions and comparing the amounts recognized for consistency with underlying documentation.

- We evaluated the overall sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of such evidence.

*Tax-free determination of the Flash business separation and the debt-for-equity exchange*

As described in Note 3 to the consolidated financial statements, on February 21, 2025, the Company completed the separation of its Flash business through a pro rata distribution of 80.1% of the outstanding shares of Sandisk Corporation (Sandisk) to the Company’s stockholders.

In connection with the separation, the Company completed an external spin-off transaction and an exchange of Sandisk common stock for a portion of the Company’s Term Loan A-3.

Management has determined that the separation and the debt-for-equity exchange (collectively referred to as the Transactions) qualified as tax-free transactions under the applicable sections of the United States (U.S.) Internal Revenue Code.

The determination of the tax consequences of these Transactions required management to make judgments about the application of tax laws and regulations.

We identified the evaluation of income tax treatment of the Transactions as a critical audit matter.

This matter required especially subjective auditor judgment and effort in assessing the significant judgments by management in applying relevant tax laws and regulations in determining the tax-free treatment of the Transactions and in performing procedures and evaluating audit evidence.

Involvement of professionals with specialized tax skills and knowledge was required.

The following are the primary procedures we performed to address this critical audit matter.

- We evaluated the design and tested the operating effectiveness of certain internal controls relating to management’s determination of the tax-free treatment of the Transactions.

- We involved professionals with specialized skills and knowledge to assist in assessing the Company’s identification, interpretation, and application of tax laws and evaluating the Company’s analyses prepared to support management’s determination that the Transactions qualified as tax-free.

| Cash and cash equivalents | | | $ | 2,114 | | | | | $ | 1,551 | |

| Accounts receivable, net | | | 1,486 | | | | | | 1,231 | | |

| Inventories | | | 1,291 | | | | | | 1,387 | | |

| Retained interest in Sandisk | | | 354 | | | | | | — | | |

| Other current assets | | | 611 | | | | | | 360 | | |

| Current assets of discontinued operations | | | — | | | | | | 3,531 | | |

| Goodwill | | | 4,319 | | | | | | 4,319 | | |

| Other non-current assets | | | 1,484 | | | | | | 837 | | |

| Non-current assets of discontinued operations | | | — | | | | | | 8,613 | | |

| Accounts payable | | | $ | 1,266 | | | | | $ | 1,054 | |

| Accrued expenses | | | 719 | | | | | | 1,053 | | |

| Income taxes payable | | | 800 | | | | | | 471 | | |

| Accrued compensation | | | 407 | | | | | | 435 | | |

| Current liabilities of discontinued operations | | | — | | | | | | 1,324 | | |

| Other liabilities | | | 559 | | | | | | 1,002 | | |

| Non-current liabilities of discontinued operations | | | — | | | | | | 368 | | |

| Treasury stock — common shares at cost; 95 shares in 2025 and 0 shares in 2024 | | | (95) | | | | | | — | | |

| Research and development | | | | | | | | | | | | | | | 994 | | | | | | 950 | | | | | | 986 | | |

| Business realignment charges | | | | | | | | | | | | | | | (6) | | | | | | 209 | | | | | | 146 | | |

| Total operating expenses | | | | | | | | | | | | | | | 1,358 | | | | | | 2,176 | | | | | | 1,939 | | |

| Operating income (loss) | | | | | | | | | | | | | | | 2,334 | | | | | | (403) | | | | | | (548) | | |

| Interest expense | | | | | | | | | | | | | | | (357) | | | | | | (414) | | | | | | (310) | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

*Assessment of variable consideration for sales to resellers*

The Company uses judgment in its assessment of variable consideration related to these items in contracts to be included in the transaction price.

The Company’s estimate of variable consideration for sales to resellers is based on several factors, including historical pricing information, current pricing trends, and channel inventory levels.

A high degree of subjective auditor judgment was required to evaluate the Company’s historical pricing information and the level of channel inventory used to determine variable consideration for sales to resellers.

We evaluated historical pricing by inspecting a sample of customer contracts with resellers and comparing the sales incentives earned during the year to the sales incentive program terms and conditions and recalculating amounts paid to the resellers.

We tested the channel inventory levels by comparing the on-hand inventory amounts for a sample of resellers to information obtained from the resellers and evaluated the reasonableness of reconciling items.

August 19, 2024

WESTERN DIGITAL CORPORATION

| Inventories | | | 3,342 | | | | | | 3,698 | | |

| Goodwill | | | 10,032 | | | | | | 10,037 | | |

| Other liabilities | | | 1,370 | | | | | | 1,415 | | |

| Revenue, net | | | | | | | | | | | | | | | $ | 13,003 | | | | | $ | 12,318 | | | | | $ | 18,793 | |

| Gross profit | | | | | | | | | | | | | | | 2,945 | | | | | | 1,887 | | | | | | 5,874 | | |

| Employee termination, asset impairment, and other | | | | | | | | | | | | | | | 139 | | | | | | 193 | | | | | | 43 | | |

| Total operating expenses | | | | | | | | | | | | | | | 3,262 | | | | | | 3,172 | | | | | | 3,483 | | |

| Operating income (loss) | | | | | | | | | | | | | | | (317) | | | | | | (1,285) | | | | | | 2,391 | | |

| Interest expense | | | | | | | | | | | | | | | (417) | | | | | | (312) | | | | | | (304) | | |

| Basic | | | | | | | | | | | | | | | $ | (2.61) | | | | | $ | (5.37) | | | | | $ | 4.96 | |

| Diluted | | | | | | | | | | | | | | | $ | (2.61) | | | | | $ | (5.37) | | | | | $ | 4.89 | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Cash and cash equivalents, end of year | | | $ | 1,879 | | | | | $ | 2,023 | | | | | $ | 2,327 | |

| Noncash exchange of Term Loan A-1 for Term Loan A-2 | | | $ | — | | | | | $ | — | | | | | $ | 2,104 | |

| Balance at July 2, 2021 | | | — | | | | | | $ | — | | | | | | | | 312 | | | | | | $ | 3 | | | | | (4) | | | | | | $ | (232) | | | | | $ | 3,608 | | | | | $ | (199) | | | | | $ | 7,620 | | | | | $ | 10,800 | |

Because of the integrated nature of the Company’s production and distribution activities, separate segment asset measures are either not available or not used as a basis for the CODM to evaluate the performance of or to allocate resources to the segments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

*Business Separation Costs*

As a result of the plan, the Company has incurred separation and transition costs and expects to incur such costs through the completion of the separation of the businesses.

The separation and transition costs are recorded within Business separation costs in the Consolidated Statements of Operations.

*Variable Interest Entities*

The Company evaluates its investments and other significant relationships to determine whether any investee is a variable interest entity (“VIE”).

If the Company concludes that an investee is a VIE, the Company evaluates its power to direct the activities of the investee, its obligation to absorb the expected losses of the investee and its right to receive the expected residual returns of the investee to determine whether the Company is the primary beneficiary of the investee.

If the Company is the primary beneficiary of a VIE, the Company would consolidate such entity and reflect the non-controlling interest of other beneficiaries of that entity.

For the periods presented, the Company determined that it did not have any VIEs that are required to be consolidated.

The carrying value of notes receivable from Flash Ventures also approximates fair value for all periods presented because they bear variable market rates of interest.

Similarly, revenue from patent licensing arrangements is recognized based on whether the arrangement provides the customer a right to use or right to access the IP.

Revenue for a right-to-use arrangement is recognized at the time the control of the license is transferred to the customer.

Revenue for a right-to-access arrangement is recognized over the contract period using the time lapse method.

There has been no change in our internal control over financial reporting during the quarter ended June [removed: 28, 2024,] [added: 27, 2025,] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended June [removed: 28, 2024,] [added: 27, 2025,] the following [removed: directors or] officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted trading arrangements for the purchase or sale of securities that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act (“Rule 10b5-1 Plan”):

[removed: Alexy, a director] [added: - Irving Tan, Chief Executive Officer] of the [removed: Company,] [added: Company] adopted a Rule 10b5-1 Plan on May [removed: 24, 2024.][added: 12, 2025.]

Under this plan, [removed: beginning on August 23, 2024,] up to an aggregate of [removed: 4,963] [added: 80,000] shares of the Company’s common stock may be sold before the plan expires on [removed: February 24, 2025.][added: May 26, 2026.]

Under this plan, [removed: beginning on August 29, 2024,] up to an aggregate of [removed: 23,593] [added: 17,502] shares of the Company’s common stock may be sold before the plan expires on [removed: December 6, 2024.][added: May 26, 2026.]

- [removed: David Goeckeler, Chief] [added: Cynthia Tregillis,] Executive [added: Vice President, Chief Legal] Officer [added: and Secretary] of the [removed: Company] [added: Company,] adopted a Rule 10b5-1 Plan on [removed: June 6, 2024.][added: May 23, 2025.]

- Kimberly E.

- Matthew E.

Massengill, a director of the Company, adopted a Rule 10b5-1 Plan on May 30, 2024.

Under this plan, beginning on September 5, 2024, up to an aggregate of 300,000 shares of the Company’s common stock may be sold before the plan expires on December 31, 2024.

There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders, which [removed: will be filed] [added: we intend to file] with the [removed: SEC] [added: Securities and Exchange Commission (the “SEC”)] no later than 120 days after the close of the year ended June [removed: 28, 2024.][added: 27, 2025.]

There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders, which [removed: will be filed] [added: we intend to file] with the SEC no later than 120 days after the close of the year ended June [removed: 28, 2024.][added: 27, 2025.]

There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders, which [removed: will be filed] [added: we intend to file] with the SEC no later than 120 days after the close of the year ended June [removed: 28, 2024.][added: 27, 2025.]

There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders, which [removed: will be filed] [added: we intend to file] with the SEC no later than 120 days after the close of the year ended June [removed: 28, 2024.][added: 27, 2025.]

There is incorporated herein by reference to the information required by this Item included in the Company’s Proxy Statement for the [removed: 2024] [added: 2025] Annual Meeting of Stockholders, which [removed: will be filed] [added: we intend to file] with the SEC no later than 120 days after the close of the year ended June [removed: 28, 2024.][added: 27, 2025.]

| [removed: [3.1](https://www.sec.gov/Archives/edgar/data/106040/000010604024000031/wdc-2024q4ex31.htm)] [added: [3.1](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000031/wdc-2024q4ex31.htm)] | | | | | | Amended and Restated Certificate of Incorporation of Western Digital Corporation, as amended to [removed: date†] [added: date (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by the Company on August 20, 2024)] | | |

| [3.2](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523020502/d425756dex31.htm) | | | | | | Certificate of Designations, Preferences and Rights of Series A Convertible Perpetual Preferred Stock [removed: (Filed as] [added: (incorporated by reference to] Exhibit 3.1 to the [removed: Company’s] Current Report on Form 8-K [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on February 1, 2023) | | |

| [removed: [3.3](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521041457/d128208dex31.htm)] [added: [3.3](https://www.sec.gov/Archives/edgar/data/0000106040/000119312525054005/d939696dex31.htm)] | | | | | | Amended and Restated [removed: By-Laws] [added: Bylaws] of Western Digital Corporation, as amended effective as of [removed: February 10, 2021 (Filed as] [added: March 13, 2025 (incorporated by reference to] Exhibit 3.1 to the [removed: Company’s] Current Report on Form 8-K [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on [removed: February 12, 2021)] [added: March 13, 2025)] | | |

| [removed: [4.1](https://www.sec.gov/Archives/edgar/data/106040/000010604024000031/wdc-2024q4ex41.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000031/wdc-2024q4ex41.htm)[.1](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000031/wdc-2024q4ex41.htm)] | | | | | | Description of Western Digital Corporation’s Capital [removed: Stock†] [added: Stock (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10-K filed by the Company on August 20, 2024)] | | |

| [removed: [4.2](https://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex41.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex41.htm)[.2](https://www.sec.gov/Archives/edgar/data/106040/000119312518042423/d538323dex41.htm)] | | | | | | Indenture (including Form of 4.750% Senior Notes due 2026), dated as of February 13, 2018, among Western Digital [removed: Corporation;] [added: Corporation,] HGST, Inc., WD Media, LLC, Western Digital (Fremont), LLC and Western Digital Technologies, Inc., as guarantors; and U.S. Bank National Association, as trustee [removed: (Filed as] [added: (incorporated by reference to] Exhibit 4.1 to the [removed: Company’s] Current Report on Form 8-K [removed: (File No. 333-222762) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on February 13, 2018) | | |

| [removed: [4.3](https://www.sec.gov/Archives/edgar/data/106040/000119312523171211/d447413dex108.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523171211/d447413dex108.htm)[.3](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523171211/d447413dex108.htm)] | | | | | | First Supplemental Indenture, dated as of June 20, 2023, by and among Western Digital Technologies, Inc. and U.S. Bank Trust Company, National Association, as [removed: Trustee (Filed as] [added: trustee (incorporated by reference to] Exhibit 10.8 to the [removed: Company’s] Current Report on Form 8-K [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on June 21, 2023) | | |

| [removed: [4.4](https://www.sec.gov/Archives/edgar/data/106040/000010604024000031/wdc-2024q4ex44.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000031/wdc-2024q4ex44.htm)[.4](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000031/wdc-2024q4ex44.htm)] | | | | | | Second Supplemental Indenture, dated as of April 26, 2024, between Western Digital Corporation, SanDisk Corporation, [removed: a subsidiary of the Company,] SanDisk Technologies, Inc., [removed: a subsidiary of Western Digital Technologies, Inc.] and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association, as [removed: trustee†] [added: trustee (incorporated by reference to Exhibit 4.4 to the Annual Report on Form 10-K filed by the Company on August 20, 2024)] | | |

| [removed: [4.5](https://www.sec.gov/Archives/edgar/data/106040/000119312521353971/d253588dex41.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex41.htm)[.5](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex41.htm)] | | | | | | Indenture, dated as of December 10, 2021, between Western Digital Corporation and U.S. Bank National Association, as trustee [removed: (Filed as] [added: (incorporated by reference to] Exhibit 4.1 to the [removed: Company’s] Current Report on Form 8-K [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on December 10, 2021) | | |

| [removed: [4.6](https://www.sec.gov/Archives/edgar/data/106040/000119312521353971/d253588dex42.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex42.htm)[.6](https://www.sec.gov/Archives/edgar/data/0000106040/000119312521353971/d253588dex42.htm)] | | | | | | First Supplemental Indenture (including Form of 2.850% Senior Notes due 2029 and Form of 3.100% Senior Notes due 2032), dated as of December 10, 2021, between Western Digital Corporation and U.S. Bank National Association, as trustee [removed: (Filed as] [added: (incorporated by reference to] Exhibit 4.2 to the [removed: Company’s] Current Report on Form 8-K [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on December 10, 2021) | | |

| [removed: [4.7](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523270415/d407149dex41.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523270415/d407149dex41.htm)[.7](https://www.sec.gov/Archives/edgar/data/0000106040/000119312523270415/d407149dex41.htm)] | | | | | | Indenture (including Form of 3.00% Convertible Senior Notes due 2028), dated as of November 3, 2023 (the “Indenture”), among (i) Western Digital Corporation, (ii) Western Digital Technologies, Inc., as guarantor, and (iii) U.S. Bank Trust Company, National Association, as trustee [removed: (Filed as] [added: (incorporated by reference to] Exhibit 4.1 to the [removed: Company’s] Current Report on Form 8-K [removed: (File No. 1-08703) with] the Securities and Exchange Commission on November 3, 2023) | | |

| [removed: [4.](https://www.sec.gov/Archives/edgar/data/106040/000010604024000031/wdc-2024q4ex48.htm)[8](https://www.sec.gov/Archives/edgar/data/106040/000010604024000031/wdc-2024q4ex48.htm)] [added: [4](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000031/wdc-2024q4ex48.htm)[.8](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000031/wdc-2024q4ex48.htm)] | | | | | | First Supplemental Indenture, dated as of April 26, 2024, between (i) Western Digital Corporation, (ii) SanDisk Corporation, (iii) SanDisk Technologies, Inc., [removed: a subsidiary of Western Digital Technologies, Inc.] and (iv) U.S. Bank Trust Company, National Association, as [removed: trustee†] [added: trustee (incorporated by reference to Exhibit 4.8 to the Annual Report on Form 10-K filed by the Company on August 20, 2024)] | | |

| [removed: [10.1](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex101.htm)] [added: [1](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex101.htm)[0.13](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex101.htm)] | | | | | | Western Digital Corporation Amended and Restated 2017 Performance Incentive Plan, amended and restated as of August 11, 2020 [removed: (Filed as] [added: (incorporated by reference to] Exhibit 10.1 to the [removed: Company’s] Quarterly Report on Form 10-Q [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on February 9, [removed: 2021)*] [added: 2021)] | | |

| [removed: [10.1(1)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000053/wdc-2022q1ex101.htm)] [added: [10.14.1](https://www.sec.gov/Archives/edgar/data/0000106040/000010604022000065/wdc-2023q1ex101.htm)] | | | | | | Form of Notice [removed: and] [added: of] Grant of Performance Stock Units and Performance Stock Unit Award [removed: Agreement- Financial Measure,] [added: Agreement] under the [removed: Amended and Restated] Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan [removed: (Filed as] [added: (incorporated by reference to] Exhibit 10.1 to the [removed: Company’s] Quarterly Report on Form 10-Q [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on November [removed: 4, 2021)*] [added: 2, 2022)] | | |

| [removed: [10.1(2)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000053/wdc-2022q1ex102.htm)] [added: [10.13.1](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex104.htm)] | | | | | | Form of Notice [removed: and] [added: of] Grant of [removed: Performance] [added: Restricted] Stock Units and [removed: Performance] [added: Restricted] Stock Unit Award [removed: Agreement- TSR Measure,] [added: Agreement – Vice President and Above,] under the Amended and Restated Western Digital Corporation 2017 Performance Incentive Plan [removed: (Filed as] [added: (incorporated by reference to] Exhibit [removed: 10.2] [added: 10.4] to the [removed: Company’s] Quarterly Report on Form 10-Q [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on [removed: November 4, 2021)*] [added: February 9, 2021)] | | |

| [removed: [10.1(3)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000011/wdc-2021q2ex104.htm)] [added: [10.14.3](https://www.sec.gov/Archives/edgar/data/0000106040/000010604022000018/wdc-2022q2ex104.htm)] | | | | | | Form of [removed: Notice of] Grant [removed: of Restricted Stock Units and] [added: Notice for] Restricted Stock Unit Award [removed: Agreement] – Vice President and Above, under the [removed: Amended and Restated] Western Digital Corporation [removed: 2017 Performance] [added: 2021 Long-Term] Incentive Plan [removed: (Filed as] [added: (incorporated by reference to] Exhibit 10.4 to the [removed: Company’s] Quarterly Report on Form 10-Q [removed: (Filed No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on February [removed: 9, 2021)*] [added: 3, 2022)] | | |

| [removed: [10.1(4)](https://www.sec.gov/Archives/edgar/data/0000106040/000010604021000053/wdc-2022q1ex103.htm)] [added: [10.14.5](https://www.sec.gov/Archives/edgar/data/0000106040/000010604024000040/a7cwdc-2025q1ex101.htm)] | | | | | | Form of [removed: Notice of] Grant [removed: of Restricted Stock Units and] [added: Notice for] Restricted Stock Unit Award [removed: Agreement -] [added: –] Vice President and Above, under the [removed: Amended and Restated] Western Digital Corporation [removed: 2017 Performance] [added: Amended and Restated 2021 Long-Term] Incentive Plan [removed: (Filed as] [added: (incorporated by reference to] Exhibit [removed: 10.3] [added: 10.1] to the [removed: Company’s] Quarterly Report on Form 10-Q [removed: (File No. 1-08703) with] [added: filed by] the [removed: Securities and Exchange Commission] [added: Company] on [removed: November 4, 2021)*] [added: October 31, 2024)] | | |